Update on Elsie: Preserving My Mother’s Story
August 9, 2022
Every family has a story. Those stories make your family unique. As psychologist Marshall Duke explains, “Ordinary families can be special because they each have a history no other family has.” In writing this weekly Family Legacy Planning series, I’ve revealed stories about my own heritage, especially the stories of my four grandparents immigrating from Eastern Europe to America to escape persecution against Jews.
Research shows that heirs who know more about their family heritage, especially examples of ancestors’ resilience, have higher self-esteem and are better equipped to handle adversity. The best way to teach younger generations about their heritage is by telling stories. For that reason, I’ve become an active proponent to encourage people to document their stories. If not, these precious family jewels will get lost over the generations.
As I advocate for preserving stories, I’ve become the proverbial cobbler who is now taking care of my own shoes. I am now engaged in a full-blown effort to create “The Elsie Blum Story.” I can’t claim the credit for this idea. The seed for it was actually planted when Sam Daniel sent me the following email after reading of my brother Irwin’s unexpected death from pancreatic cancer at age 65, and how Elsie jumped in at age 85 to take over the family business:
Your weekly stories are now a must-read in my inbox! Your story about Irwin touched me deeply. Now this story about your mother is incredible to read! Elsie is a hell of a woman, and I mean that nicely! I think a wonderful way to honor her legacy is to sit down with her for a series of discussions about the family history. At Elsie’s age, she is a walking, talking wealth of stories and knowledge about your family history. Record her voice speaking about her life, your father’s life, her parents and your father’s parents. I wanted to do this with my mother before she passed, but alas, she developed dementia and was gone in a matter of months. Needless to say, I regret that lost opportunity.
Sam’s email was a wakeup call to record my mother’s voice before dementia or death come along (often unexpectedly) and then it’s too late. I wanted that history to be told in Elsie’s charming “Lady Bird Johnson” deep South accent. Fortunately, Elsie at age 91 is still going strong, and 100% sharp mentally. I teamed up with “Live On” to help create a video history of Elsie’s story. A few days before filming began, my mom expressed some reluctance (a common occurrence). She agreed to proceed on the condition that I sit next to her throughout the filming. Thankfully, we have now completed several hours of recordings, and the evidence is preserved. We now begin the next step of converting that footage into a final product.
In next week’s post, I’ll share more specifics about the process of creating “The Elsie Blum Story” and explore various options for documenting a lasting family history. I’ll also share a one-minute “teaser” video of Elsie’s story.
Elsie update: As the attached photo shows, Elsie has now added “runway model” to her resume, selected by The Stayton to model in their recent fashion show. Though her mind is still completely sharp, after two falls in the last couple of years, she agreed it was time to retire her high heels and use a walker. Some may have too much pride to admit the need for walking assistance, but Elsie is a role model to stand tall, use a walker, and walk with dignity. To anyone who is unsteady, please follow Elsie’s lead and take the safe route. It’s not worth falling.
Marvin E. Blum
Elsie Blum, adding runway model to her resume, an inspiration for future generations to stand tall and walk with dignity.
Unequal Inheritances: Tips from Experts
August 2, 2022
In last week’s post, I shared a few samples of the high-octane reaction to the topic of sibling strife over unequal inheritances. I brought home the point that such warfare is not exclusive to the mega-rich. Last week’s real-life stories came from families of all levels of wealth.
In today’s post, I want to offer tips I received from other advisors. Like me, they’re in the trenches learning the “do’s” and “don’ts” from seeing inheritances in action, the ones that worked and the that went awry.
From a life insurance advisor:
I wish families could see how dangerous it is to family harmony to try and split things like businesses and land among three and four kids. Obviously, I am biased to the insurance industry as a solution but the creation of cash at death for the purpose of estate division can be a huge key to maintaining the relationships in the family. If people truly realized its power, they would be actively pursuing getting as much life insurance coverage as they can.
From a family counselor/life coach:
Having a third-party mentoring the children to prepare them for what is in their future is a great remedy and it reduces the risk of relational issues. It doesn’t eliminate the risk, but it does reduce it.
From a trust officer:
I am in favor of equal division to avoid family conflict. Another problem we see is pot trusts (a trust for multiple beneficiaries where distributions are made to the individual beneficiaries as needed, and there’s no score-keeping)—nobody is happy if one sibling has more needs than others. It is better to have an estate split into equal separate trusts, with the irresponsible sibling having a corporate trustee and the other siblings serving as their own trustee. That way the siblings understand that each of the siblings received the same amount from the parents’ estates and that everyone’s shares are in trust.
From another trust officer:
Seriously consider naming a corporate trustee, if for no other purpose than to administer the estate before the split and each child can take over their own trust at that point. Naming a corporate trustee to serve for the first few years only can often diminish the tendency of the heirs to go after each other. This is especially effective if the corporate trustee is brought into the conversation with the adult children and it is understood that getting through the estate tax filing, any probate, and the initial winding up of the decedent’s dealings is not only not fun, but it can be exhausting and beyond the capability of heirs. And, by the time each heir hires their own lawyer to represent them as fiduciary (in that scenario no one generally believes their interests are truly aligned, someone always believes the other heir is somehow going to try to take advantage of the situation), it quickly becomes obvious that the corporate fiduciary appointed to just get through the administrative phase of the estate is well worth the cost.
Once the estate distributes to the resulting trusts, the heir can become the sole trustee at that point and can do what they want. They can move the assets from the corporate trustee, or if the corporate trustee has done its job well, retain the relationship as a value-added partner.
Experience has shown me how ugly it can get when mom and dad swore in our conference room “our children definitely get along well, they won’t have any problems.” What is always underestimated is the influence of the siblings’ spouses as well.
From a financial advisor:
Thanks for another important article. I’m observing over time that more and more of my work and of the value that my practice offers to families has to do with developing thoughtful ways to increase family communication and understanding of the hopes and wishes of the parents, as well as their kids. Of course, this then interconnects with every other aspect of the family enterprise from business management to family governance to estate planning to portfolio management.
I couldn’t have said it better myself.
A final tip from me: When parents are debating leaving an unequal inheritance to their kids, I often advise them to consider making unequal distributions to the kids while the parents are alive, without keeping score. However, when it comes to the Will, leave the estate in equal shares. A Will is a permanent document, and having a reminder of inequality out there forever can continue to sting. If kids aren’t equally capable of managing the assets, leave the assets in equal trusts for each child, and carefully select the appropriate trustee to manage each of the trusts. That way, ownership is equal, even if management is not.
There is no “right” or “wrong” answer; no “one size fits all.” The key is to engage in a thoughtful process, seeking guidance from estate planning advisors who bring experience, wisdom, objectivity, “head,” and “heart” to the table. Every family wrestles with its own dynamics. Address the issues; don’t sweep them under the rug. I urge you to consult with experts who are here to help your family build a lasting and meaningful legacy.
Marvin E. Blum
Tribute to sisterhood: the first post-pandemic reunion of Marvin Blum’s wife Laurie and her three sisters. Even during the separation, the four sisters stayed closely connected on Zoom and by phone, fulfilling their parents’ mission for the family to always remain close. (Left to right: David and Linda Usdan, Peggy and William Adler, Laurie and Marvin Blum, and Diane and Barry Wilen.)
Title: Sibling Warfare: Reader Reactions
July 26, 2022
My Sibling Warfare post on June 28th, together with last week’s post on unequal inheritances, have really struck a nerve. Not surprisingly, many families are struggling with sibling conflict. The feedback I’ve received has been so informative that I’ll share some highlights with you.
The five stories of family feuds in my June 28 post created quite a stir. WealthManagment.com picked up the article and published an edited version here entitled “Five Famous Families Undermined by Sibling Conflict.”
Those five examples illustrate what can happen when sibling rivalry grows into fighting of epic proportions. Although those five families are all mega wealthy, I’m reminded that family infighting is not limited to the ultra-rich. In the feedback, I learned stories of sibling strife in families of moderate means that are equally toxic.
Several stories involved leaving the family home to only one of the kids, for reasons that appeared fair to the parents, yet the news was not well-received by the other kids. Part of the distress was related to financial disparity of the inheritances but much more was due to hurt feelings. In these stories, the prevailing view was for the parents to do their best to explain their reasons, and even if there’s no buy-in from all the children, at least there were no surprises when the Will was read.
Other stories I received involve family businesses left unequally to the kids. Again, the parents had valid reasons for the unequal division, such as leaving more to those active in the business and attempting to make up the difference by leaving other assets to those not active in the business. In one extreme case, the entire business (considered the family’s premier asset) went to one kid and real estate (of much lower value) to the other kid. The one getting the real estate felt slighted, but watch what happened. Fast forward years later and the business was bankrupt while the real estate soared in value.
One mother shared with me an ongoing internal debate over her plan to leave the estate equally to her four children in an effort to preserve family harmony but was concerned about one child being of much lesser means. The mother held a heart-to-heart family meeting to explain her intentions and seek a moral commitment from the children to be there for each other and use the inheritance to support a sibling, if ever needed.
Yet another story involved two siblings, one very responsible and the other terribly irresponsible. Their parents left both halves of the inheritance to identical restrictive trusts in an effort to protect the irresponsible one. The result was that the responsible sibling felt punished for their sibling’s irresponsibleness.
These are all heart-wrenching, real-life examples reminding us there are no perfect answers. As an advisor stressed to me, an estate plan should not be set in stone, as adjustments may be necessary as life unfolds. Estate planning is an art, not a science. Estate planning advisors have a unique perspective and can offer valuable guidance in helping parents address these thorny issues.
In next week’s post, I’ll share some of the valuable insights I received on this topic from life insurance, financial, life coach, and trust advisors. Stay tuned.
Marvin E. Blum
Two of Marvin Blum’s five grandkids, sweet siblings Lucy Blum (age 3) and Grey Blum (age 1). The Blum family mission is to keep this loving sibling connection going strong throughout their lives and keep pouring down the love to future generations.
Leaving Unequal Inheritances to Your Kids: Fair or Poison?
July 19, 2022
My post 3 weeks ago on “sibling warfare” generated a hot reaction and a request for me to dive deeper into that topic. I’ll start that today by addressing a controversial topic that often leads to sibling warfare: leaving unequal inheritances to your kids. This topic was the subject of a February 19, 2021 New York Times article by Susan B. Garland titled “The Unequal Inheritance: It Can Work, or It Can ‘Destroy Relationships.’” I have confronted this issue many times in my 44 years as an estate planning lawyer, as clients struggle with the question of “equal vs. fair.” Do I leave my estate equally to my kids, or do a do an unequal division because that would be more fair?
In considering the pros and cons, be aware that this is a bombastic decision. True, equal isn’t always “equitable,” but Garland cautions that “unequal inheritances can trigger sibling fighting after a parent dies. Some feuds end up in court.” Perhaps that’s why, in spite of the many reasons to go unequal, most opt to go with equal. A survey of bequest intentions reported that 93% plan to divide their estate equally among their children, regardless of the children’s financial circumstances. (Source: “Love and Legacy: Are Children’s Affections Related to Parents’ Bequest Intentions?” by Matthew Sommer and HanNa Lim, Journal of Financial Service Professionals, Jan. 2022.)
Even with the overwhelming majority opting for equal inheritances, many parents still wrestle with this decision. Here are 10 reasons parents may leave assets unequally.
- One child may be struggling financially, while others are well-off.
- One child provided care to an elderly or ailing parent.
- One child has kids and the other doesn’t.
- One child has a disability.
- One child is responsible financially and the other is a spendthrift.
- The parents paid for one child’s expensive education or gave them a house.
- The parents bailed out a financially irresponsible child over the years.
- It’s a blended family where the relationship with stepchildren vs. biological children isn’t equally strong.
- Parents leave kids different types of assets, such as a brokerage account to one (that increases in value) and a house to another (that declines).
- You love your grandchildren equally and set aside a portion of the estate to go per capita to grandkids, even if one child has 2 kids and the other has 4.
In the final analysis, if you’re going to leave assets unequally, family counselors urge making an effort to get buy-in from all the kids. Garland quotes Arline Kardasis of Elder Decisions: “To head off sibling strife, parents should explain their decision to each child individually or as a group, or even seek mediation.” As do many others, I’m always eager for a dose of wisdom from Warren Buffett and his Vice Chairman Charlie Munger. My family and I attend the Berkshire-Hathaway annual meeting each year, and when I asked Buffett and Munger to share their views on inheritances, Buffett concurred with the notion of going for buy-in: “There may be circumstances where one child has much more of an interest in one type of an asset or another, and you want to make sure your definition of equality in terms of handling different kinds of assets meshes or at least is understood by the children so they don’t think that you gave a farm or a house or something of that sort that resulted in inequality when you thought it was equality.” On the other hand, Buffett’s 98-year-old sidekick Munger was more circumspect. Sharing the concern of many who steer away from unequal inheritance, Munger (a man known for his directness and brevity) said simply: “If you’re going to treat them unequally, that is poison.” (Click on this link for an article sharing my reactions to the 2022 Berkshire-Hathaway Annual Meeting.
Garland sums up the risk: “No matter what the parents’ reasoning may be for leaving unequal bequests, experts advise that they understand how such a decision can hurt the people they care about most.” She quotes Harry Margolis, an estate lawyer in Boston: “Inheritances are often seen as a proxy for love. It’s hard to give unequal amounts and not have a child feel that Mom loved me less or more. Even an investment banker who doesn’t need the money has feelings.” Bottom line: If you’re going down the unequal path, proceed with caution. You may be laying the groundwork for sibling warfare.
Marvin E. Blum
Marvin Blum’s son Adam with Charlie Munger, Vice Chairman of Berkshire-Hathaway. In response to Marvin’s question, Munger cautions that unequal inheritances are “poison.” Proceed with caution in order to build a lasting family legacy.
MCA Is a Cause That Makes My Heart Sing. What’s Yours?
July 12, 2022
Our recent Family Legacy Planning posts have stressed the importance of relationships and social interaction in improving the quality and quantity of our lives. Developing that theme further, I think of the various communities we belong to and how those interactions benefit us. We all belong to a number of communities: family, friends, work, church/synagogue, clubs, civic groups, etc. Today, I want to focus on the many benefits of civic engagement. One benefit is that it provides us a community, as we build relationships with an organization’s volunteers and staff. That, in and of itself, is enriching. But civic involvement provides us with so much more.
I’ve emphasized before how author Jay Hughes teaches that wealth comes in multiple forms—Financial Capital being just one of five. The other four are Human Capital, Intellectual Capital, Social Capital, and Spiritual Capital. Civic engagement runs across all of these capitals, but in particular Social Capital is where we give our time, talent, and treasure to society, building relationships in the communities where we live, while also providing the family with a life of meaning. Author Chaim Potok challenges us in The Chosen to live a life with meaning: “It is hard work to live a life with meaning.” Civic involvement provides a pathway to live such a life.
Over the years, I’m grateful for the numerous causes where I’ve had the opportunity to serve. Most have to do with the arts and education, especially those providing opportunities for young people to thrive. Chief among these have been Trinity Valley School, Fort Worth Symphony, Texas Cultural Trust, B-Sharp Youth Music Program, along with my school and religious affiliations. But one that is really grabbing my heart, and the focus of today’s post, is The Multicultural Alliance (“MCA,” formerly the National Council of Christians and Jews, “NCCJ”). This organization started in Fort Worth in 1951, and I’ve been actively involved for over 30 years. I’m now in my third stint of serving as MCA’s Presiding Chair. Over these 70+ years, the mission has stayed the same: to fight bias, bigotry, and hate while working to build inclusive communities. It’s important work, but never has it been as important as it is now. Today, more than ever, we need MCA to break down barriers that separate us and bring people together.
We are living in turbulent times. The rise in hate crimes is beyond tragic. Earlier this year, our own community experienced the horror of a terrorist taking members of Colleyville’s Beth Israel Synagogue hostage. The hostages were saved by the heroic bravery of Rabbi Charlie Cytron-Walker. Rabbi Charlie’s wife Adena served as MCA’s Vice President of Programming for the last 15 years. So this terrorist act hit home. Rabbi Charlie is a member of our close-knit MCA family.
Under the superb leadership of our President Dr. Cheryl Kimberling, MCA sponsors numerous programs to educate us, opening hearts and minds. One of our signature programs is Camp CommUNITY (formerly Camp Anytown), where high school students from diverse backgrounds undergo a transformative experience over five days. Campers return home with a newfound acceptance of others, no longer seeing differences as something to fear, but rather as something to embrace. Given that our world has become more divided than ever, now is MCA’s time. MCA builds bridges of understanding to bring us back together. My daughter Lizzy was a camper and later a counselor, and I served as an adult advisor, and the experience was life changing for both of us.
(In 2016, I was honored and humbled to receive MCA’s Annual Award at that year’s MCA Awards Dinner. To learn more about my passion for MCA, click here to read my acceptance speech.)
I share all of this to encourage others to find a cause that (in the words of Lady Bird Johnson) “makes your heart sing.” MCA does that for me. Furthermore, MCA operates on a very limited budget, so every donation truly moves the needle. In selecting a cause to support, it adds to the satisfaction if you know you’re doing something that directly impacts and advances an important mission.
As I advocate for Family Legacy Planning, I cannot overstress the benefits of civic engagement. The Blum Firm specializes in helping families incorporate into the estate plan a charitable structure that’s right for you. Philanthropy (whether it be your time, your talent, your treasure, or all three) is a laboratory for building a legacy. A family coming together to support meaningful causes creates powerful family glue. It brings generations together, fostering family communication and trust. Siblings and cousins develop group decision-making skills. Philanthropy strengthens the family’s Social Capital and builds deeper connections among family members. Not everyone in a family can work in a family business, but everyone can play a role in family philanthropy. Civic activity not only benefits the community, but the family who does it gets back considerably more than it gives. It’s truly a “win-win.”
Marvin E. Blum
Marvin Blum, Presiding Chair of The Multicultural Alliance, at this year’s MCA Awards Dinner, promoting the MCA mission to fight hate and build inclusive communities.
Procrastinating Planning? Heed this Warning from “Ray Ray”
July 5, 2022
For those of us who are putting off something until “tomorrow,” I recently had a wake-up call to remind us that time is zooming by faster than we realize. The wake-up jolt happened as my daughter’s family was packing for their move from Dallas back to New York. The story centers around my oldest grandchild Stella (age 9) and her little baby doll (or “lovey”) that she named “Ray Ray.” (Warning: You may want to have a Kleenex handy.)
Like most little kids, Stella became attached to Ray Ray as an infant. It’s common for kids to cling to a comfort object like a blankie, stuffed animal, or other soft object. It provides them security, especially at bedtime or when adjusting to a new situation. Stella took Ray Ray everywhere, and cared for her as if she were her own little baby. We all understood how much Ray Ray meant to Stella. Once when Stella dropped Ray Ray from her stroller on an evening walk, I retraced our steps with a flashlight and found Ray Ray on the street, thankfully before a car ran over her. Another time, when movers were packing Stella’s family for a move from New York to Dallas three years ago, they accidentally packed Ray Ray in a box. It was weeks before Stella and Ray Ray were reunited, and it was quite a heartwarming reunion to witness. I knew the day would come when Stella would move on from Ray Ray, but I wasn’t prepared for how it would affect me. That day came a couple of weeks ago, and I’m still fighting back tears.
Packing for this move, we were determined to avoid the mistake of Ray Ray winding up again in a moving box. When we gathered Ray Ray and other items to keep separate, Stella announced this gut-punch: “I don’t need Ray Ray anymore. I don’t care if you bring her with us.” All of a sudden, I felt the swift passage of time. I didn’t feel any older, but in a flash, Stella was no longer a little girl. It called to mind lyrics from Babes in Toyland that always gets to me: “Toyland, toyland, little girl and boy land…. Once you pass its borders, you can ne’er return again.” Time marches on; it doesn’t wait till we’re ready.
Here’s my takeaway: For all those things we’re putting off till the future (whether something we need to do or a joy we’re postponing), the future is now. Time flies, and as we get older, it speeds up even more. As Chaim Potok alerted us in The Chosen, in the big scheme of things, a lifetime is no more than “the blink of an eye.” The key is to fill that blink with meaning. My wife Laurie’s grandfather Albert Herzberg said to do that, you have to be intentional. He lived by a “three a day” motto: Before his head hit the pillow at night, he required himself to do three “good turns” each day. Laurie’s mother Aimee Kriger lived by that motto too. It’s hard to do, but it certainly adds up to a life filled with meaning.
Is there something you’re putting off? Estate Planning? Red File? Legacy Letter? Business Succession Planning? Family Meeting? Stella reminds us that time is sweeping by faster than we think.
I can hear Tevye & Golde in “Fiddler on the Roof,” singing at their daughter’s wedding:
“Is this the little girl I carried?
Is this the little boy at play?
I don’t remember growing older,
When did they?…
Sunrise, sunset. Sunrise, sunset,
Swiftly fly the years.
One season following another,
Laden with happiness and tears.”
Now where’s that Kleenex?
Marvin E. Blum
Left photo: Marvin Blum’s granddaughter Stella clinging to her lovey “Ray Ray” three years ago, rescued from a moving box after weeks of separation: “Reunited and it feels so good!” Center photo: Ray Ray, thankfully still “alive” after a long journey from New York to Dallas. Right photo: Stella Savetsky today (age 9), growing up faster than her grandfather Marvin Blum can handle.
Sibling Warfare: Let’s Battle This Epidemic
June 28, 2022
It seems every day the media is reporting on another family falling off the rails. One sibling is suing another. A couple of weeks ago, I wrote about Rabbi Danziger’s words when Laurie and I were exchanging wedding vows, and that message applies here. When conflict erupts, step back and remember that we don’t all see things the same way. Try to respect the viewpoints of others, listen more, and be thankful for the variety of spices in the Havdalah spice box. The world is sweeter because it’s a blend of different spices. But look, I’m not naïve. Rabbi Danziger’s words worked for Laurie and me. But when siblings are on the brink of war, it takes more than a spice box to resolve it. Let’s explore that.
Every family struggles with conflict. Sibling rivalry is the norm. Our own two kids come from the same gene pool and had the same upbringing, but in so many ways they’re as different as day and night. Probably every parent can relate. When they were little, Adam and Lizzy were always sparring. Laurie and I couldn’t do anything to stop it. I felt better when our wise family friend Jack Belz told us to just embrace it: “They’re developing valuable negotiation skills that will serve them well in life.” Laurie’s sister Diane Wilen, Ph.D. psychologist, comforted us too: “That behavior is developmentally appropriate.”
Yet when kids get older and the fighting gets to epic proportions, that’s another story. The typical response is to try to sweep it under the rug. It’s risky to open that can of worms. Maybe if we ignore it, it’ll go away. News flash: The conflict doesn’t go away. It festers. Eventually, if not addressed, the volcano erupts. Vesuvius often explodes after Generation One (especially the matriarch) is gone. Consider what happened in these five cases that all received widespread media attention.
- Barclay: British billionaire twins Frederick and David Barclay owned the Ritz Hotel near Buckingham Palace. Frederick and his daughter Amanda were having private conversations to explore the sale of the hotel, but video footage caught David’s son installing a bug in Frederick’s chair. Brother David’s family captured 1,000 separate conversations Frederick had with prospective buyers, lawyers, bankers, and trustees. Frederick sued David’s family for this “commercial espionage on a vast scale,” alleging that David’s sons were trying to freeze out their cousin Amanda. “The Barclays need to remember that 60% of family business failure is because of a lack of open communication and trust. Without rebuilding this, all their businesses, a large part of the family wealth, and the family bonds themselves, will be gone.
- Feil: New York real estate mogul Louis Feil left his $7 billion dynasty to his four children (one son Jeffrey and three daughters) in equal shares. Jeffrey ran the business and received a sizable salary, but distributed just $300,000 per year to his sisters. The three sisters sued, alleging that Jeffrey was starving them out so he could buy them out at a discounted price. The family lost its glue when the parents died. According to Jeffrey, when his father died, “the binding of the book came loose,” and when mother Gertrude later died, “the pages fell out.” A better succession plan would have provided a substantial cash flow for all four business owners.
- Angelos: Louis Angelos filed suit against his brother John, alleging John manipulated the family to take control of Baltimore Orioles baseball team and the rest of the family fortune. “Louis Angelos’ lawsuit depicts his brother as manipulating, misleading and intimidating their mother to gain more power over the family fortune. In one instance, when Louis Angelos asks her why she puts up with John’s abuse. She allegedly replied, ‘He’ll go ballistic.’ ” Those are some ugly family dynamics.
- Spanos: After the death of their parents, two of the four Spanos children were named as co-trustees of a family trust owning a substantial part of the Los Angeles Chargers football team. Sister Dea filed suit seeking removal of brother Dean as a co-trustee. Dea contends that Dean’s decision to move the Chargers to Los Angeles from San Diego was financially ruinous. She also alleges Dean breached fiduciary duties by diverting $105 million of trust funds to various debts, and borrowing $60 million “for the wasteful purchase of an airplane for Dean’s and Michael’s use that has no legitimate business justification.” Siblings Michael and Alexis are siding with brother Dean, “united in support of our parents’ and grandparents’ wishes.” A key takeaway: When creating trusts, select fiduciaries very carefully, and be especially cautious not to pit siblings against each other as co-trustees.
- Briscoe: Former Texas Governor Dolph Briscoe’s goal was to keep his 600,000 acre ranch in the family long after his death, to be shared equally by his three children. Oldest daughter Janey died in 2018 leaving no heirs, and now the surviving siblings Cele and Chip are fighting in Uvalde County court over how to divide up Janey’s portion of the family fortune. Cele and her kids accuse Chip “of manipulating his frail older sister into signing documents that disinherited them from her estate, tilting control of the Briscoe ranching fortune to him and his two sons in contravention of their grandfather’s wishes.” Chip contends that Cele “drifted away from the family business after moving to Dallas and marrying into a dynasty with a fortune of its own” and is “using the litigation to force a breakup of the family holdings.” Governor Briscoe must be rolling over in his grave. It’s unfortunate he didn’t structure his estate plan to leave his estate to a dynasty trust, instead of relying on the hope that heirs would abide by his wishes to keep the ranch intact.
These are but five examples; there are countless more. The mistakes made in each of the five above cases provide some guidance on what not to do. Create a thoughtful trust structure that reflects the family’s mission and values. Select fiduciaries carefully and avoid pitting siblings against each other. Hold family meetings with exercises to improve communication and trust. Ideally, conduct such activities while Generation One is still around to provide influence and family glue. Consultant Matthew Wesley asks heirs to make a “moral commitment” that they’ll never sue each other. Seek a more collaborative and private resolution. Similarly, author Mitzi Purdue’s family indoctrinates heirs early on that “quarrels stay in the family”–don’t air your dirty laundry in the courtroom. Don’t try to go it alone. There are excellent consultants who can help your family. Laurie and I have engaged them to great success in our own family.
I don’t claim to have all the answers, but this I do know. Don’t ignore the problem of sibling strife. It will come back to haunt your family.
Marvin E. Blum
- Barclay: Ellen Milligan, “Bugging the Ritz, Private Investigators and Billionaires at War,” Bloomberg (www.Bloomberg.com), May 20, 2020.
- Feil: Sarah Rose and Peter Grant, “Real Estate Family Wars With Itself: Feil Siblings Grapple with Empire Created by Their Father,” The Wall Street Journal, September 2, 2013.
- Angelos: Jeff Barker and Jean Marbella, “Five Angelos Family and Orioles Secrets Brought to Light in Brother’s Lawsuit,” The Baltimore Sun, June 10, 2022.
- Spanos: Adam Schefter and Kimberley Martin, “Dean Spanos Sued by Sister, Accused of ‘Misogynistic’ Behavior as Legal Battle Continues Over Control of Los Angeles Chargers,” ESPN (www.ESPN.com), June 10, 2022.
- Briscoe: Laura Kusisto and Anne Tergesen, “Squabbling Heirs Rock Former Texas Governor’s Ranching Empire,” The Wall Street Journal, January 14, 2022.
Marvin Blum’s kids at play 32 years ago. Adam putting a headlock on Lizzy was playful back then, but be on guard to make sure little sibling quarrels don’t turn into grownup sibling wars.
You Want to Stay in Your Home Forever? Consider Elsie Blum’s Alternative
June 21, 2022
In last week’s Family Legacy Planning post, I presented the case that social interaction improves both the quality and quantity of life. I ended by saying this week’s post would tell my own mother’s story. This email describes the journey of Elsie Blum increasing her social interaction at age 90, and the positive impact on both her and on the rest of the family.
Here is the dilemma many adult children in my shoes face: an elderly parent is living alone in their own home and fiercely wants to stay there. However, their quality of life is declining. They may need health care. The house requires constant maintenance and repair. They are alone and often lonely. Such is the Elsie Blum saga, a story with lots of trials and tribulations, but fortunately a very happy ending. I share this story with the hope it may help others in a similar situation.
After my father died in 2003, my mom began hanging out with some new girlfriends and poured herself into daily volunteering at our synagogue. She was healthy, busy, independent and life was good. Then, 3 years ago, she fell and broke her pelvis. The one-year recovery process was excruciating. She insisted on returning from the rehab facility to her multi-level home where we installed chairlifts on the stairs and lots of handicap bars. We hired round-the-clock care, which was a very unsatisfying solution. No one was happy. But she recovered and regained her independence. Then, a year ago, she fell in her kitchen and broke her hip. Same song, second verse. Once again, she wanted to return from the rehab facility to her home. This time, we were determined to find a different solution.
I struggled with telling her what she didn’t want to hear. Then, the words of my sister-in-law Lea Ann (wife of my deceased brother Irwin) made all the difference. She said, “If Irwin were here, he’d just make arrangements for Elsie to move to a community living environment, and it’d be done!” Irwin was a “can do—get it done” kind of guy. We were both deeply devoted to my mom, but my style was different—I wanted to go all lengths to try to please my mother. My wife Laurie instantly agreed with Lea Ann, and when my mom told us to find full-time care so she could go home, Laurie told her, “We’re not going to do that. We tried that before, and it didn’t work.” Elsie objected, but instantly replied: “Well, if I’m not going to live at home, then I’m going to live at The Stayton.”
We had been trying for years to get my mom to move to The Stayton, a luxury high-rise independent living environment with great food and activities. She had refused to even go look at it. In her mind, it was a “nursing home.” It’s SO not a nursing home. It’s more like walking into a Ritz Carlton Hotel. When she opened the door to the idea of moving there, we jumped on it instantly. The very next morning, we arranged for Laurie, Lea Ann, and me to tour The Stayton, meeting my mother’s decorator Brad Alford there to help us select a residence. As we were leaving her rehab room, she cautioned me not to commit to anything. Hearing Lea Ann’s words in my head, I answered: “This is Irwin Blum talking now. If we find the right place, we’re going to lock it in. I don’t want to take the risk of losing it.” We went to Stayton, and all the while there, I was channeling my brother Irwin.
We found the perfect apartment. Brad Alford decorated it to become a showplace, truly breathtakingly beautiful. The first couple of days were rocky, as Elsie was not a happy camper. That all changed by day 3, when she began meeting the other residents. She marveled at how friendly everyone there was. That was about one year ago. Since that day, my mom has never dined alone. Every day is filled with meaningful activities—programs, concerts, lectures, even Stayton business meetings (which she especially loves, given her head for business). She’s part of a loving and close-knit community. Her face looks younger and relaxed. No more home maintenance. No more loneliness. I mean it when I say she actually seems happier than I’ve ever seen her in my whole life. She has peace of mind, and so do we.
My mom lives in the independent living section, but if ever needed there’s assisted living, skilled nursing, rehabilitation, and also memory care. Thankfully, at 91, she’s going strong and has no need at this time for those other areas. (Please G-d, I hope I have those genes—there’s at least a 50% chance!) I’m convinced The Stayton is adding years to her life, and not just more years, but quality years. I suspect Elsie would say she wished she’d moved to The Stayton ten years ago. We can’t wind the clock back. But as family therapist Brad Nowlin (whose mom Sallie and her husband Joe also live at The Stayton) wisely posited: “When’s the best time to plant a tree? Twenty years ago. When’s the next best time? Now.” We just planted a tree.
The moral to this story: Although many elderly desperately cling to the idea of staying in their own home for the rest of their life, there’s very likely a better solution. They just don’t know it. Elsie would be happy to talk to them.
Marvin E. Blum
Marvin Blum’s mother Elsie Blum with granddaughter Elizabeth Savetsky, living her best life at age 91 at The Stayton.
Ten Keys to a Long (and Good) Life
June 14, 2022
In today’s post, I continue exploring the first part of the Blum Family Mission Statement: “It’s all about relationships.” In my research on the value of relationships, I discovered a powerful connection between relationships and longevity. It comes as no shock that interpersonal connections improve both the quantity and quality of life, but what does shock me is how high social interaction falls on the list of top reasons for longevity.
By and large, The Blum Firm’s client base beats the life expectancy lottery. We want to help our clients enjoy a positive senior experience. Legacy planning is not just about improving the quality of life for your heirs, but also about enriching your own life experience. To that end, we engage actively in aspects of “Elder Law,” a label that didn’t exist when I started my law practice. With our Red File checklist, we encourage clients to provide instructions on their care in case of incapacity—not just where they want to live or who will be the caregivers, but also favorite foods, TV shows, colors, etc. We promote planning to avoid guardianship, encouraging the use of financial and medical powers of attorney. We also provide expertise to help protect clients from the tragic epidemic of elder financial abuse, whether from con artists, caregivers, and even family members who prey on the elderly. Our mission is to help clients improve not only the length of their days, but also the quality of those days.
There are certain factors that contribute to long life that are beyond your control, such as genetics. But there are many actions that are within your control. Julianne Holt-Lunstad is a researcher at Brigham Young University who studied tens of thousands of middle-aged people. She examined their lifestyle: their diet, their exercise, their medical status, how often they went to the doctor, whether they smoked or drank, etc. After seven years, she and her colleagues reported their findings. Psychologist Susan Pinker also reports on such research in her 2017 Ted Talk entitled “The Secret to Living Longer May Be Your Social Life.” Here, in descending order of importance, are the top ten contributors to living longer:
10. Clean air
9. Hypertension medication
8. Staying lean
6. Cardiac rehab
5. Flu vaccine
4. Quit drinking
3. Quit Smoking
2. Close relationships
1. Social integration.
According to Pinker, “face-to-face contact releases neurotransmitters that foster trust, reduce stress, kill pain, and induce pleasure.” She distinguishes between in-person and digital interaction, as the greater benefit comes from interacting in person with people as you move through your day. Social integration doesn’t have to be a close friend. It can be the conversation with a mailman. For years, my wife Laurie delivered Meals on Wheels and had meaningful visits with her “clients” as she brought meals into their homes. She was told countless times from both her clients and their family members what a difference that visit made in the day.
Bottom line: Close personal relationships and face-to-face interactions are the top two keys to living both a long and a good life. In next week’s post, I will apply this proposition to my own mother’s situation. Watch for how Elsie Blum, at age 90, improved her life by moving to a wonderful senior living community at The Stayton in Fort Worth.
Marvin E. Blum
Elsie Blum (left) with son Marvin Blum and daughter-in-law Laurie Blum, improving both the quantity and quality of Elsie’s life through social interaction.
It’s All About Relationships: My Best Friend, Talmage Boston
June 7, 2022
A few weeks ago, I dedicated a post to the first prong of the Blum Family Mission Statement: “It’s All About Relationships.” I dedicated the post to my fellow Canoe Brothers, a brotherhood rooted in our shared UT law school experience. Today, I want to single out one of such Canoe Brothers, my best friend Talmage Boston. Our connection was forged by sharing a law school experience and all the times together thereafter. This weekend, Talmage is being honored in Houston by the Texas Bar Foundation, receiving the coveted Dan Rugeley Price Memorial Award for his leadership in the legal profession and his writing talents. The Canoe Brothers will be there to cheer for Brother Talmage, who has been a role model to many, but especially to me. My friendship with Talmage has enriched my life immeasurably.
I first met Talmage at our college dorm Dobie Center on The University of Texas campus. We had a lot in common: each of us a dedicated student, solidly committed to family, faith, and friends. Yet in other ways, Talmage was light years ahead of me—outgoing, confident, athletic. Those were the days of the Vietnam war and Watergate, and Talmage was politically outspoken as Chair of the Texas Union Ideas & Issues Committee. He even ran for UT Student Body President and almost won (beat out by the first female to serve in that role). In my view, Talmage was the proverbial “Big Man on Campus.”
In our senior year, Talmage approached me with the idea of becoming roommates the following year at UT Law School. I was honored and flattered. I deliberated a bit, as I’d never had a roommate (other than my brother Irwin), and there was also the subject of religion. All of my Jewish friends lived with other Jewish people. It was natural for young Jews to stick together, as the Jewish connection is powerful both religiously and culturally. My close friend Karen Cortell (now Reisman) even raised the question: “Marvin, what about the fact Talmage isn’t Jewish?” I knew Talmage had many Jewish friends and respected people of all backgrounds. I decided to take the risk.
(Of course, there was the time I brought my week of kosher food for Passover, along with a kosher skillet to warm it in, and came home to discover pork chops being fried in it. Let’s describe that as a “teachable moment.” I cherish the memory.)
Talmage opened me up to a world outside the classroom. My social life soared, even joining with Talmage to throw some pretty spirited parties (the themes of two of them—“Africa” and “Mexico”—conjure up some crazy memories). Talmage looped me into his friendships with campus leaders and later with national political, literary, and sports heros, such as the late, great Bobby Brown. Talmage taught me to have the courage to seek anything you want. (“The worst they can say is ‘no’.”) He even gave me the determination to go after Laurie, the girl of my dreams, and joined me on a trip to London to “run into” Laurie and her family and convince her to marry me. (It worked!) That’s true friendship.
Through continued shared experiences, my 50-year friendship with Talmage just keeps growing. Talmage encourages me to continually grow and reinvent myself. In that regard, Talmage as an accomplished speaker and author of several books is a true role model. He champions my painting and my writing, urging me to write a book on Family Legacy Planning. (Maybe someday?)
I’m still Marvin and he’s still Talmage, but we’ve been a great influence on each other in ways both profound and whimsical. He even has me joining him to sing my heart out at outdoor concerts. Talmage is good. I’m not, but he taught me “who cares?” One such night in song was at a concert of Eagles songs, and the title of their hit “Take It to the Limit” fits Talmage to a T! All of us who know and love Talmage would agree he lives life by “taking it to the limit.”
I urge everyone to find a friend who stretches you and completes you, the way Talmage fills in the gaps for me. Talmage recently sent the Canoe Brothers a quote of Ralph Waldo Emerson from FDR’s January 1945 inaugural address: “The only way to have a friend is to be one.” The search for friendship requires each of us to make an investment. The more we invest, the greater the ROI (return on investment). Invest in a relationship with someone who brings out your best and challenges you to grow.
I’ll close with the two ending stanzas in Henry David Thoreau’s poem “Friendship,” which so aptly depicts the intertwined roots of my friendship with Talmage.
Two sturdy oaks I mean, which side by side,
Withstand the winter’s storm,
And spite of wind and tide,
Grow up the meadow’s pride,
For both are strong
Above they barely touch, but undermined
Down to their deepest source,
Admiring you shall find
Their roots are intertwined
Marvin E. Blum
Left photo: Talmage Boston and Marvin Blum (right) on Europe trip in 1978—growing a beard was Talmage’s idea, always stretching Marvin out of his comfort zone. Right photo: Marvin Blum (left) and Talmage Boston donating the “Blum & Boston Scholarship” at UT Law School in honor of a lifelong friendship that started during their law school years.
Family Friction? Be Thankful for the Variety of Spices
May 31, 2022
Last week’s post focused on the polarization in government and the impact on tax law. Each side stakes out its position and tries to force its views on the other side. Even when there’s plenty of common ground, no consensus emerges. Witness this week’s renewed debate over gun legislation. There is no spirit of compromise—it’s all or nothing. If you can force together 51 Senate votes, it’s “all.” If you can’t, it’s “nothing.” This dysfunction isn’t limited to government. Such partisanship behavior also spills over into families.
I wrote recently that 2022 is the “Year of the Wedding” after so many COVID wedding postponements. Marriage creates a perfect storm for polarization. I know firsthand. Laurie and I are a match made in heaven, but even we had our share of tension 43 years ago as we joined together in holy matrimony.
Laurie and I each came from spiritual homes with a strong Jewish identity, but different practices and traditions. Our situation is certainly not unique. The tendency is to cling to how your family did it as the “right” way—the perfect recipe for “I’m right” and “You’re wrong” behavior. I shared this struggle with Rabbi Harry Danziger who officiated at our wedding. While we were standing under the chuppah exchanging vows, Rabbi Danziger provided an eloquent solution.
Our wedding was on a Saturday night after the ceremony of “Havdalah” marking the “separation” between Shabbat and a return to the ordinary work week. The sabbath endows us with a higher soul, symbolized in the Havdalah service by savoring the fragrance of a mixture of spices in a spice box. In a subtle reference to our different viewpoints, Rabbi Danziger urged us to celebrate those differences by recalling the Hebrew spice box prayer: “We thank G-d for the variety of spices.” The world is a sweeter place because we each bring to it our own spices: our own experiences, beliefs, traditions, and customs. I began to see our differences as a spice box that could blend into a sweeter aroma. Indeed, that’s the home Laurie and I created, where we blended our upbringings in a way that created a spiritual Jewish home that’s right for us.
In his article in The Atlantic “A Gentler, Better Way to Change Minds,” Arthur Brooks offers these tips on building consensus:
- View those who disagree with you as valued voices, worthy of respect and attention. Go out of your way to welcome them into your circle.
- Don’t take rejection personally. You can love someone with whom you disagree.
- Listen more. When it comes to changing someone’s mind, listening is more powerful than talking.
- Cultivate openness, non-discrimination, and non-attachment to views in order to transform others. For your values to truly be a gift to others, you must first weaken (though not abandon) your own belief attachments.
I’ll add one more tip to this list. Ancient Greek Stoics saw conflicting viewpoints in a positive light. The Daily Stoic Life teaches the value of being part of a Scipionic Circle, surrounding ourselves with peers who see things differently and stretch our minds. “If you’re not exposing yourself to new ideas, how will you get better?… If you’re not being challenged, how can you become wise?” Adopt a new perspective on conflict. Don’t dodge it, embrace it. Families who look at conflicting beliefs through this lens can build mutual respect, find common ground, reach consensus, and emerge with a sweeter spice box of honored viewpoints.
Marvin E. Blum
Wedding of Marvin and Laurie Blum (1979) celebrating the blending of spices.
Tax Planning in the Age of Dysfunctional Government
May 24, 2022
I have a great love for teaching. It brings me joy to share my knowledge of estate planning and help families achieve multi-generational success. One such opportunity was last week, when I spoke in Tyler at the Texas Society of CPAs East Texas Expo.
At the start of my speech, it occurred to me that my last speech in Tyler was in November 2016, the morning after election day. I woke up that morning to the news that Donald Trump defeated Hillary Clinton. As I drove to Tyler, I was processing the impact of that outcome on tax planning. My whole speech changed.
Regardless of your political views, it’s indisputable that Trump’s election ushered in an era of polarization and partisanship. Early in the Trump presidency, the 2017 Tax Cuts and Jobs Act became law, passing without one Democrat vote. We entered a world where bipartisan support of legislation became more and more rare.
We are now in an age where the pendulum swings far right, then far left, back and forth, continuously over-correcting. Gone are the days when the pendulum hovered in the moderate zone near the middle of the curve. The problem is exacerbated by the primary system for selecting nominees, an electoral process that tends to favor extreme left and extreme right candidates.
In this age of extremism, tax law has become a ping pong ball. Each side uses tax law to advance its agenda. The result is an ever-changing tax landscape. We never know what’s coming.
But, we do know what the tax law is today. As tax law changes, Congress almost always grandfathers planning completed before the new law passes. My message in Tyler was this: take advantage of planning opportunities we have today while we’re still in the “Golden Age of Estate Planning.” To review my planning recommendations, click here for my presentation Last Chance Tax Planning: The Golden Age of Estate Planning Won’t Last Forever (If You’re Not Doing Estate Planning Now, What Are You Waiting For?).
In next week’s Family Legacy Planning email post, I’ll address how the dysfunction that’s happening in government is also happening in families. In my mission to help families heal and prosper, I’ll offer some insights and tips on building consensus.
Marvin E. Blum
Marvin Blum speaking on “Last Chance Tax Planning” at the TXCPA East Texas Expo in Tyler.
A Favorite Annual Experience in Our Family
May 17, 2022
In last week’s Family Legacy Planning post, I shared that the first prong in the Blum Family Mission Statement is Relationships. It takes work to build solid relationships. They don’t come together unless each party invests 3 T’s: Time, Transparency, Truth, all of which leads to the critical fourth T: Trust.
I quoted Malcolm Gladwell for the proposition that relationships and shared values grow out of shared experiences. To repeat Gladwell’s wisdom: “You can’t share values with others until you share meaningful experiences with them…; the relationship, trust and friendship has been shared through the experiences first.” Therefore, for families and friends to build trusting relationships, they must share meaningful experiences. I urge all families to create traditions for heirs to spend meaningful time together, keeping the family connected long after the matriarch and patriarch are gone.
I also encourage families to endow those experiences in the estate plan, so the funds will be there to cover the cost. In past posts, I quoted Mitzi Purdue who credits her ancestors for setting up a trust to cover the cost of family reunions (every 12 months on the Sheraton side of the family with more lavish trips, and every 18 months on the Purdue side of the family with more modest trips). Purdue asserts that those trips are the single biggest reason both sides of her family have remained connected over the years, as well as the single biggest reason their family business continues to thrive.
In thinking about the close connectedness of my wife Laurie’s family, I realize those strong relationships are no accident. Four Kriger sisters grew up in Memphis but now live in various states, and the next generation has spread out across the country even more. However, the Kriger family is intentional about regular family gatherings. These gatherings are a tribute to their deceased parents, who made it clear that family closeness was a top priority. One of those traditions is an annual family trip to Omaha to attend the Berkshire-Hathaway annual meeting. It’s an important ritual that has been continuing for over a decade.
After a two-year break due to COVID, it was good to be in Omaha again for this year’s annual meeting. People are always curious about our takeaways from Warren Buffett and Charlie Munger, who entertain the crowd of some 30,000 Berkshire groupies with their wit and wisdom, answering questions all day with only a one-hour lunch break. Buffett (age 91) and Munger (age 98) are an inspiration. At their advanced ages, there is no sign of mental slippage. They are role models for us to always keep our brains active and never quit learning.
Two times in the past, I was fortunate to be selected to ask questions, and that was a special highlight. The first question was for Buffett to discuss his estate plan and to elaborate on his famous line: “I want to leave my children enough so they can do anything, but not so much that they can do nothing.” Click here for Buffett’s answer. The second question was to ask Buffett to discuss his philanthropy and how he decided to become a philanthropist. Click here for his answer. I have found that people care what Buffett and Munger say, so at future meetings I’ll try to seek more guidance from them on estate planning topics.
Here are some other takeaways from this year’s meeting:
- The number one reason for Berkshire’s success is the company’s culture. Create a positive work environment where people feel they are part of a family who cares about them. Hire the best people and set them free to soar. That’s certainly my goal at The Blum Firm.
- The second half of life offers the best opportunities. Learn from mistakes you made in the first half of life, and that sets you up for success in the second half of life. Don’t beat yourself up over mistakes. Even Warren and Charlie made plenty of mistakes.
- Be forgiving when your team makes mistakes, as long as it’s not a slip of integrity. Buffett and Munger are unequivocally supportive of their team, as long as the employee behaves with utmost integrity.
- Don’t panic over stock market declines. See it as an opportunity to pick up bargains. Ride out the waves, and you’ll win over the long run.
- Maintain a sense of humor. Warren and Charlie made every topic fun and enjoyable, no matter how serious. I believe their sense of humor helps sustain them.
The Kriger family is already making plans for next year’s annual meeting. Here’s hoping Buffett and Munger will still be going strong next year, but given what I just saw, I’d put my money on them.
I urge you to come up with some meaningful experiences your family can share. It’s essential in building and sustaining family connection. As you consider the possibilities, perhaps you’d like to join us next year in Omaha!
Marvin E. Blum
Marvin and Laurie Blum (far left) with family members on an annual outing to the Berkshire-Hathaway Annual Meeting—building relationships by sharing meaningful experiences.
It’s All About Relationships—Meet the Canoe Brothers
May 10, 2022
Early on in this Family Legacy Planning series, I stressed the importance of each family creating a Family Mission Statement. The process involves (1) discovering the values that family members hold in common, (2) jointly developing a vision for the kind of family they want to be, and (3) merging those values and vision into a written expression of the family’s guiding principles. As each family member embraces that mission, it helps the family develop a core. Indeed, the mission statement guides the family through decisions and helps keep it on track and unified. Ideally, the family mission guides the whole estate planning process.
The Blum family adopted a three-pronged mission statement:
- Productive Work
- Living a Meaningful & Spiritual Life
For us, it all starts with relationships. I’d like to dive deeper into that first prong of our mission statement. The seed for it was actually planted years ago when Fort Worth community leader Gretchen Denny said to me: “Marvin, it’s all about relationships.” That statement struck me as profound, yet a bit puzzling. I was too young to fully understand where Gretchen was coming from. Why did that beat out everything else we strive for in life? Gretchen, widowed at a young age when her attorney husband Sam Denny died way too early, realized that more than anything else, relationships are what fulfills us and nurtures us. As I’ve gotten older, I now get it. That’s why it earned the position of first place in our mission statement.
Harvard professor and author Arthur Brooks supports my thesis in his article in The Atlantic “10 Practical Ways to Improve Happiness.” In addition to being there to support and nurture us, relationships actually tops the list on how to increase our happiness. An international team of researchers identified 68 ways to raise happiness, then narrowed it to ten and ranked them. Note how Brooks’ description of number one and number two echo my emphasis on relationships:
- Invest in family and friends. The research is clear that though our natural impulse may be to buy stuff, we should invest instead in improving our closest relationships by sharing experiences and freeing up time to spend together.
- Join a club. The “social capital” you get from voluntarily and regularly associating with other people, whether or not you do so through a formal club, has long been known to foster a sense of belonging and protect against loneliness and isolation.
I am witnessing firsthand how relationships are enriching my life. It started 47 years ago when I entered The University of Texas Law School and bonded with an extraordinary group of classmates. Over the years, those friendships have deepened. Thanks to the efforts of my best friend Talmage Boston (“the connector”), we have not only remained connected, but we continue to grow closer. The reason those friendships have grown into lifelong relationships is because a core group of us share meaningful experiences with each other. Certainly, sharing the law school experience was bonding, but we are even more glued together because of regular activities we do together, especially an annual canoe trip on the Guadalupe River. We call ourselves the “Canoe Brothers.”
On those canoe trips, we open our hearts and minds to hear each other’s life stories. We each bring our own values and opinions. We agree, we disagree, we debate, but we do it all with respect. Through this shared canoe experience, we build trust, and trust is the foundation for a lasting relationship. All of this is possible because we make the time to be together and share experiences. The renowned author Malcolm Gladwell expressed it perfectly: “You can’t share values with others until you share meaningful experiences with them. It is through these meaningful experiences that you come to know what their values are. Those you agree with and those you don’t; but the relationship, trust and friendship has been shared through the experiences first.”
As I urge families to engage in a legacy-building process, I stress the importance of family enrichment activities. Like the bonding that Canoe Brothers share on the Guadalupe, families likewise need intentional, regular experiences together. At The Blum Firm, we encourage clients to weave this priority into the estate plan. The safest way to foster lasting family unity is to set aside funds in a FAST trust dedicated to paying for family meetings, meaningful group travel, and other family enrichment. Endowing family experiences strengthens the ties that bind us. It’s the best inheritance you can leave your heirs.
Marvin E. Blum
Marvin Blum (back row, fifth from left) with law school classmates, now the “Canoe Brothers.” The motto on the t-shirts tells the bond of these relationships: “Behold, how good and pleasant it is when brothers dwell together in unity! Psalms 133:1”
I Do, Round Two: Second Marriage Estate Planning
May 3, 2022
I was honored to speak recently to the Midland-Odessa Business and Estate Council. I selected a subject that has become a significant part of our estate planning practice—second marriage estate planning.
Why is this such a hot topic? Consider these statistics:
- 50% of today’s marriages are second (or third or fourth) marriages for at least one of the spouses.
- 75% of people who divorce marry again.
- 65% of remarriages involve children from a prior marriage.
Estate planning for the traditional “nuclear” family is less and less the norm. We are living in a world of the “blended family” (or, “modern family” as popularized on TV). More than half of Americans are part of a blended family.
Multiple marriages bring issues that the estate plan needs to address:
- Onboarding a new spouse (perhaps with kids of his/her own) into a family unit
- Relationships between children and a stepmother or stepfather
- Relationships between stepsiblings
- Age disparity between spouses
- Wealth disparity between spouses
Such issues create a potentially hot family dynamic. The Blum Firm is committed to helping blended families create thoughtful estate plans, reducing the risk of later friction. We are also committed to helping families navigate these new relationships and foster a family’s human capital.
Here’s another sobering statistic: 60% of remarriages end in divorce. Accordingly, the responsible couple will do prenuptial planning to address the “what if” before saying “I do.”
In my speech, I identified 18 fact situations that could give rise to heartache if not properly addressed in the estate plan. A copy of my presentation on Second Marriage Estate Planning is available here. The Blum Firm is honored to share planning tips to help preserve family harmony in cases of “I Do, Round Two.”
Marvin E. Blum
Marvin Blum speaking to Midland-Odessa Business and Estate Council on “I Do, Round Two: Second Marriage Estate Planning.”
Declaration of INTER-dependence
April 26, 2022
Last week’s email told the story of how my support group (especially my brother Irwin) came to my rescue when the 2000 tornado destroyed The Blum Firm law office. I introduced the concept of INTERDEPENDENCE. Families who are interdependent are there for each other, helping everyone thrive as we go through life’s ups and downs together.
As families become more affluent, there is a tendency toward each person becoming more independent. Dr. James Grubman describes this process in Strangers in Paradise. Grubman refers to new wealth generators as “immigrants to the land of wealth.” As families leave the land of the working class and immigrate up the wealth ladder, they travel away from interdependence, more and more to a land where each person is independent. Our American culture encourages that process. We strive to bring up our children to be independent and self-reliant. We are a country created out of a Declaration of Independence. Yet independence can go too far, even to the point of causing family estrangement. As family governance consultant Tom Rogerson puts it: “Independence is great, except when it fully cannibalizes interdependence.” Yes, we declare our independence, but this country was founded on a Constitution that begins: “We the people,” not “I, the person…”
Lower net worth families have tremendous interdependence. Why? It’s out of necessity. I can relate. Irwin and I grew up in a small house sharing a bedroom, sharing a bathroom, and we all pitched in to work in Blum’s Café. Dinner table conversations were about the family business and making ends meet on a tight budget. On the rare occasions when we bought a new car, my dad took us along to watch him negotiate. Irwin and I went door-to-door collecting coat hangers to sell at the cleaners, two for a penny. (Actually, Irwin sent me out to collect the hangers while he stayed back to “run the business,” but I felt honored as the kid brother to be included in his business venture.) That upbringing provided us a natural family glue. It’s no wonder we were always there for each other, tornado and all. I believe Irwin knows he could count on me too (and not just when “helping” him write all his papers for school). As I’ve shared before, the ultimate example was on Irwin’s deathbed from pancreatic cancer, when he held onto life just long enough to provide blood for a genetics kit, so that I (his only at-risk blood relative) could gather critical genetic information for my own health care. Irwin held onto life, knowing I needed that blood study, and then he died moments after giving blood.
Tom Rogerson uses a graph to illustrate the risks to family cohesion when they move away from interdependence.
The horizontal axis moves from low wealth to extreme wealth. The vertical axis starts with interdependence, then moves up to independence, and further up to an unfortunate state of dependence. The graph shows that as wealth increases, family members become more and more independent. Dinner conversations are more social (“How’s your golf game, Dad?”) and less consequential. Kids have their own bedrooms and go to summer camp, no longer learning how to work with and negotiate with siblings. They lose training on how to make decisions together. They become less and less connected.
The lower left corner fosters entrepreneurialism. That’s the environment that created the juice for most of today’s wealth creators to thrive. Moving toward independence, with each person in his own silo, is detrimental to entrepreneurialism and especially detrimental when kids enter a family business. They love each other, but they don’t KNOW each other deeply. At its worst, it can lead to lives of isolation and substance abuse, hence the arrow leading back up towards dependence.
The graph shows that there is a movement for families of extreme wealth to reconnect, to intentionally work on rebuilding relationships with each other. The goal is to reestablish communication and build trust. The best way to do this is to embark on regular family meetings with team-building exercises and group learning. A third-party consultant should facilitate the meetings. Parents should join as participants and not run the meeting. The estate plan needs to adapt as well, using trusts to encourage family togetherness, enrichment, and mentorship of heirs. The goal is to build self-esteem and empower heirs, rather than create entitled “trust babies” waiting on their monthly distribution, deprived of incentive to get out of bed. Ultimately, the family creates a “familiness” culture where they are woven together in a family fabric, as Irwin and I were there for each other during the tornados of our lives.
I am grateful to Tom Rogerson, Jim Grubman, and other mentors who have awakened me to this new age of estate planning. I am an eager proponent of “qualitative” estate planning to go along with the “quantitative,” or estate planning that is both “heart” and “head.” I want to thank all of you who are encouraging me to share my passion to help families build a legacy and thrive from generation to generation. As commercial real estate broker Bill Zei of Dallas graciously wrote me: “Your writings help me stay mindful of how deeply important it is to stay united with family.” I’m honored to be a champion for that cause. At your urging, I will continue to share the lessons from the “soft” side of estate planning in my evolving journey as a holistic trusts and estates lawyer. The Blum Firm welcomes the opportunity to help you incorporate legacy planning into your estate plan.
Marvin E. Blum
Striving for an INTER-dependent Blum family, where we are all there for each other, including for the two little boys having a hard time. Marvin and Laurie Blum flanked by daughter Lizzy’s family (left) and son Adam’s family (right).
When Life Throws You a Tornado
April 19, 2022
The most recent topic in our Family Legacy Planning series is the importance of resilience. Specifically, I wrote last week of how Laurie and I overcame the heartbreak of a giving birth to a stillborn child by drawing strength from ancestors who’d endured inhumane atrocities yet survived. Reactions to that post were heartfelt and affirming, as many shared how they have likewise overcome rough times. Like me, their resilience was fueled by the strength of their family ties, as well as the support of a loving community of friends. One response particularly grabbed me. Here’s what my San Francisco colleague David Eckstein, CFA sent me:
I’d like to add my voice to the many who are thanking you for sharing your stories. This one reached me in particular. My wife and I have also faced tragic misfortune, including suddenly losing the oldest of our three sons a few weeks before his 27th birthday. Such times test our resilience and also tell us whether we have invested enough in our family and community to receive the support we need to get through times we can’t handle alone. We have been fortunate in that regard and consider ourselves blessed in spite of our losses. Thank you for all you’re doing to make a difference in your family, friends, clients and business acquaintances. It’s working!
The words “we have invested enough in our family and community to receive the support” particularly struck me. The support we receive isn’t automatic. We have to invest in these relationships, so we will be there for each other when needed. Like everything else in building a legacy, we have to be intentional to make it happen. Building a family legacy is arguably the most important investment we make in our lives.
I’ll expand on a story I’ve shared before about recovering from the 2000 tornado that destroyed my law office, and how that resilience was also empowered by the support of family and community. Leaving work on March 28, 2000, the sky was clear and there was no warning of the impending tornado that soon swept through downtown Fort Worth destroying the Bank One Tower and other structures. This was before technology was as advanced, when we were still dependent on paper. I didn’t even own a cell phone yet (what we then called a “car phone”). The Blum Firm was suddenly homeless, without access to any of our files. This is when my support group came to the rescue. Lifelong family friends Morty Herman and the Schuster family were early responders. Morty and the lawyers at Brown Herman law firm squeezed up and made room for us to office with them. When Bank One gave us a one-hour access to return to our destroyed space to grab belongings, Stuart Schuster loaned us a large van from their Marvin’s Electronics store. Allen Schuster provided us boxes from his storage facility business. “Take as many as you need.” My father showed up at my house and handed me $10,000, saying: “This may come in handy.”
But the number one hero in this story is my brother Irwin. As I shared in previous emails, we lost Irwin five years ago to pancreatic cancer, at age 65. One of my favorite Irwin memories is how he sprang into action to help me deal with the tornado devastation. Irwin wasn’t a man of words; he was a man of action. Irwin and I picked up the van and the boxes and drove to Bank One. Irwin drove the van like he was a professional truckdriver, undaunted by its massive size. Entering the parking garage, the rack on top was too tall for the height restriction and bounced off. Unfazed, Irwin hopped out, threw the rack in the back of the van, and kept rolling along to park in the garage. We were on a mission. We had a strict one-hour time limit to grab all we could.
We entered the office space. I was in shock. Everything in the office looked as if it had been picked up and thrown across the office. Desks and furniture were toppled over and broken. Wet paper was everywhere, full of glass chards from the shattered windows that imploded inward into millions of razor-sharp pieces. The building was formerly a glass tower that now had no exterior walls. Live wires were hanging everywhere. Birds were flying through the space. I was paralyzed. Irwin wasn’t. Irwin began assembling boxes, put on work gloves and a safety helmet, and started tossing in everything he could grab, filling box after box. I finally took his lead and joined in. We had to get moving; we only were allowed one hour.
We stacked the boxes floor to ceiling into elevators, then managed to force them all into the van. As we hit the highway, Irwin could only see out the side mirrors (though I’m not sure he ever looked). He’d hit the gas pedal and change lanes; I guess other vehicles just dodged us. Exiting I-30, he pulled into the drive-through at Whataburger for a burger and soda, and he ate it while driving home to store the boxes in my garage. Even for those who didn’t know Irwin, I’m sure you get the picture.
Irwin always looked out for me. He had a “take charge” personality and he enjoyed being the protective big brother, even well into our adult years. This story brings me to a new topic I’ll be developing in coming emails: the value of family INTERDEPENDENCE, as opposed to the customary concept of raising kids to be INDEPENDENT. My colleagues Jim Grubman and Tom Rogerson are also great advocates for this concept. I am grateful Irwin and I were interdependent, so we were there to provide family support for each other when needed. Life throws us curveballs and tornados. We need to be there for each other.
Marvin E. Blum
Fort Worth’s Bank One Tower, including The Blum Firm law office, destroyed by the 2000 tornado.
The Greatest Test of Resilience in My Life (and How Zaidy Got Me Through It)
April 12, 2022
Over the last several weeks of our Family Legacy Planning series, we’ve highlighted the importance of preserving ancestors’ stories of resilience. Heirs draw strength knowing they descend from survivors who had what it took to overcome life’s obstacles. Certainly, I’ve made it through hard times better by knowing I come from survivors who endured persecution. I’ve told the story of my “Zaidy” Eliezer Weinstock and what the Weinstock family endured when escaping Hitler, losing two children who didn’t make it out in time. The Weinstock family picked up the pieces and created a new life in America. In our family, we often gain confidence to handle problems by saying, “We come from good stock, WEIN-stock.”
When I started writing this series over a year ago, I never intended to tell my personal stories. My plan was only to share estate planning tips. However, in using some of my own stories to illustrate these tips, I’ve received on outpouring of encouragement to continue sharing. After the recent emails about my ancestors’ hardships, I was asked to describe a time when I applied those lessons in my own life. At your urging, I will open up about the single hardest moment I have faced in my life. I’ve shared this before, but with your indulgence, I’ll provide more detail, hopefully offering to all the gifts of faith, love, and hope.
After Laurie and I were married a couple of years, we rejoiced at becoming pregnant with our first child. It was a perfect pregnancy all the way up through the ninth month. Laurie went into labor and we headed to the delivery room, stopping along the way to buy a disposable camera (remember those days?). When my mom called on the phone in the delivery room, she greeted me by saying, “Hello, Daddy!” It was then I shared a disconcerting update—the nurse was having trouble finding the baby’s heartbeat. We remained hopeful, as sonogram technology was still fairly new and maybe there was some technical glitch. The doctor arrived and the news became grim. We’d lost the baby. No one ever understood why or what happened. It was a mystery we’d have to live with forever. That was February 11, 1982. We buried our baby girl and returned home to an empty nursery.
We were devastated. I wasn’t ready to disassemble the crib, but Laurie told me we had to do it. We hid away all the shower gifts Laurie had received from her co-workers at Fort Worth National Bank. Laurie returned to work, daily confronting the question in the elevator: “What’d you have?” Laurie found the courage to answer each time, “We lost the baby.” You’ve likely gathered by now that I married a woman of phenomenal strength. Laurie’s a sweet, gentle Southern girl, but lives up to the stereotype of a “steel magnolia.”
We were grateful to be pregnant again within a few months, but as you can imagine, we were filled with trepidation. Laurie wouldn’t even tell anyone she was pregnant. About halfway through the pregnancy, we were at a symphony event and Roz Rosenthal nodded toward Laurie’s tummy with a question mark on her face. That night, I told Laurie it was time to let the word out.
On the morning of February 10, 1983, about a month before the due date, I went to work like a normal day. Laurie soon called that she thought she felt a contraction. There had been no signs of early labor. Was this a false alarm? We weren’t taking chances. We met her doctor at the delivery room who confirmed that this was the real thing. Soon after midnight, February 11, 1983, Laurie gave birth to a healthy baby boy. I’ve always believed that Laurie and the Divine willed it to be, that February 11 should be a miracle day for us. Exactly one year to the day after losing our first baby, we were blessed with Adam.
I’ll share another fact I’ve not revealed before. We saved the Hebrew name we were going to use for our first baby girl, with the hope we’d someday have a daughter. That name was Pesha Ita, the Hebrew name of my grandmother Pauline, the daughter of “Zaidy” Eliezer Weinstock. Within three years, our prayers were answered with the birth of Elizabeth Pauline (“Pesha Ita” in Hebrew). Our daughter is yet another miracle, as she carries the name of such a valiant ancestor, while she also carries in her the soul of a sister in heaven.
Fast forward to our daughter’s first pregnancy. Several weeks before Lizzy’s due date, we received an urgent call that her baby was under stress. Laurie and I rushed to the airport, got the last two seats on the next flight to New York, feeling an all too familiar déjà vu from our own first pregnancy. That was a scary trip—a nonstop flight with nonstop prayer. We rushed to Mount Sinai Hospital, and within the hour arrived a small but healthy baby girl Stella, the first member of the fifth generation in the Meyer Oberstein–Pauline Weinstock family tree. “Zaidy” Eliezer Weinstock was there for us once again. Never lose faith, and never underestimate the power of our ancestors to pull us through. They are angels on our shoulders as we go through life. May we preserve their memories and their stories forever.
Marvin E. Blum
Pictured left: The joy of motherhood, as Laurie Blum caresses her newborn son Adam born February 11, 1983, exactly one year after a stillborn birth.
Pictured right: Marvin Blum experiences the joy of fatherhood with his infant son Adam.
Bringing Lessons of the Holocaust into 2022
April 5, 2022
The last several emails in our Family Legacy Planning series have revealed the atrocities suffered by my family in the Holocaust. My Zaidy’s eye was poked out in a Russian czarist pogrom in his village in Ukraine. My grandfather Meyer at age 9 escaped a firing squad in Poland when he was caught seeking work after curfew. My son-in-law Ira’s grandmother Miriam survived Auschwitz, coming out at 72 pounds. Her only surviving relative was her brother Adolf (“Unkie”), also imprisoned in forced labor and concentration camps. Profoundly, Unkie declared “We beat Hitler!” on his deathbed as he observed the birth of Jewish descendants, including my granddaughter Stella who started a new generation in our family. These Holocaust stories have stirred a powerful reaction, especially given the parallels with the atrocities now happening in Ukraine.
It’s a well-known proverb that “unless we learn from history, we are doomed to repeat it.” Considering the present-day Russian aggression, I fear we aren’t adequately learning from history. It’s critical that we preserve and pass down stories of ancestor survival to our heirs. The need is especially urgent as the generation of Holocaust eyewitnesses is rapidly perishing. That brings me to my message today. How can we best bring our ancestors’ stories into 2022?
My daughter Lizzy Savetsky has a solution. Lizzy has a vast Instagram following and is using these stories to sound an alarm. We must never forget! Remember the people we come from and draw courage from them. Lizzy’s megaphone literally and figuratively awakens us that we cannot stand by silently while our brothers and sisters are persecuted and murdered. Laurie and I stand in awe of Lizzy’s heart and bravery.
Lizzy’s premise is that the ultimate way to preserve memories is to see where it happened with our own eyes. To that end, Lizzy joined a Heritage Trip to Poland sponsored by Jewish International Connection New York. Lizzy went to Auschwitz. She sat on the railroad tracks where cattle cars brutally transported millions of Jews to their death. She saw the barbed wire fences with the sign proclaiming the Nazi lie “Arbeit Macht Frei.” Indeed, work did not make them free. Lizzy stood in the place where her husband’s grandmother was forced to gather the possessions of gas chamber victims, finding her own mother’s monogrammed handkerchief and thereby discovering that her mother had been gassed to death. She saw a room filled with hundreds of thousands of shoes of victims and realized every shoe was once on a person’s foot. The six million victims were not statistics. They were the people who wore these very shoes.
When Lizzy returned, she wrote her reflections from being there in person, in the place where it happened. Click here to read her heartrending summary of the trip. Imagine the powerful disconnect to stand in a beautiful forest in Poland and try to reconcile how, in that very place of nature’s paradise, Nazis could line up thousands of Jews and shoot them into a ditch, many buried alive. Lizzy closes with a quote from the rabbi on their trip: “The Nazis tried to bury us, but they didn’t realize we are seeds.” Those tortured souls who were buried in that ditch are now sprouting new life, lives like my five grandkids Stella, Juliet, Lucy, Ollie, and Grey.
How does this message of family heritage and travel tie into The Blum Firm’s work in Family Legacy Planning? Here’s how. Every family has roots. It’s important for future heirs to go in person “to the place where it happened.” As Lizzy pointed out to me last week, it’s even more meaningful if a trip like this is taken as a family. Family travel, whether a roots trip or other travel, helps keep a family unified. I’ve previously quoted author Mitzi Purdue as she credits annual family travel as the foremost reason her family (heirs to Sheraton Hotels and Purdue Chicken) stays connected. In creating your estate plan, I strongly urge you to set aside funds in a separate trust to be used to pay for family travel and other family enrichment, like family meetings, training, and experiences. If you fail to fund it, my observation is that it stops happening after the patriarch and matriarch are gone. The fund can be a FAST Trust (Family Advancement Sustainability Trust) or any other trust vehicle. Consider dedicating a life insurance policy to fund the trust, a convenient way to provide the money without disrupting the rest of the inheritance.
The Blum Firm would be honored to help you build such a family enrichment fund into your estate plan. We want to partner with you to keep your ancestors’ stories alive and help future generations of your family stay connected.
Marvin E. Blum
Marvin Blum’s daughter Lizzy Savetsky on the railroad tracks at Auschwitz, feeling a connection to the millions of murdered Jews transported there in cattle cars, on those very tracks.
What Stella’s Birth Means (“We Beat Hitler” – Part 2)
March 29, 2022
Last week’s Family Legacy Planning post continued exploring the importance of preserving and passing down a family heritage. The focus was on the significance of the birth of my oldest grandchild, Stella. On both sides of her family, Stella descends from ancestors who miraculously escaped death in the Holocaust. Stella’s birth symbolizes victory over Hitler’s evil attempt to kill all the world’s Jews. Hitler killed one-third of the world’s Jews, but he didn’t win. Stella is living proof.
The last two weeks’ emails told stories of survival of two of Stella’s ancestors on her mother’s side, my “Zaidy” Eliezer Weinstock from Ukraine (who lost an eye in a Russian pogrom) and my grandfather Meyer Oberstein from Poland (who escaped a Russian firing squad as a young boy). Today, we turn to survival stories of ancestors on Stella’s father’s side, my son-in-law Dr. Ira Savetsky.
Ira’s grandmother Miriam Feuerstein was viciously uprooted from her girlhood home in Czechoslovakia and transported, along with her parents, to Auschwitz, the most infamous of Nazi concentration camps. One of her brothers, Yitzchak, was shot into a ditch when the Nazis wiped out the town. Another brother Adolf was taken to a Hungarian forced labor camp, and later to Mauthausen concentration camp. Miriam’s job at Auschwitz was to sort the clothing of those who had been burned alive in gas chambers. She discovered the tragic fate of her parents when she found her mother’s monogrammed handkerchief among the pile.
Miraculously, Miriam survived, coming out of Auschwitz at 72 lbs. She was able to find her brother Adolf, who had also miraculously survived. All their remaining family had been murdered. Miriam and Adolf immigrated to America and started a life in New York. For yet another miracle, Miriam recovered and later gave birth to a daughter Aliza (Ira’s mother) and a son Elliot. Aliza had 4 children. To help keep the memories alive, Aliza named one of her daughters Miriam, after her mother, and she gave her son Ira the Hebrew name of Yitzchak (the Hebrew name for Issac), after her uncle.
As I retell this story of survival, I realize the power of personalizing the horrors of the Holocaust and war. It’s hard to absorb statistics, like the killing of six million Jews, but this story reminds us that those were six million individual lives. As my dear friend Todd Healy responded to my email about Zaidy, “Thanks for personalizing it for so many of us who don’t have the connections to the tragedies that you do!” These are people, someone’s parents, sisters, brothers, children. They are not just numbers.
Ira’s family affectionately called their Uncle Adolf, “Unkie.” Unkie was like a grandfather to Ira. Thankfully, Unkie lived a long and productive life in America. On his deathbed, he reflected on the families he and his sister Miriam created, who were surrounding his bedside. Looking at them with awareness that each descendant of Holocaust survivors represents the continuation of the Jewish people, these were Unkie’s dying words: “We beat Hitler!”
As the attached photo of Unkie holding his great-great-niece Stella proves, indeed we did beat Hitler! Stella’s life has a purpose. Look into Stella’s eyes—there is hope for the world. Each of our lives has a purpose. As we discover our “why”—why we’re here, may that motivate us to each live a more purposeful and meaningful life.
Marvin E. Blum
Holocaust survivor Adolf Feuerstein (“Unkie”) holding his great-great-niece Stella Savetsky (Marvin Blum’s granddaughter). Stella is living proof of Unkie’s dying words: “We Beat Hitler!”
What Stella Means to Our Family Heritage (“We Beat Hitler” – Part 1)
March 22, 2022
I am overwhelmed by the outpouring of support I received from last week’s Family Legacy Planning email “I Am Ukrainian.” I told the story of my “Zaidy” Eliezer Weinstock who lost an eye in a Russian pogrom against Jews living in Polona, Ukraine. Miraculously, Zaidy escaped to America with his four youngest children, including my grandmother Pauline. Zaidy’s two oldest children, my Great Aunt Elke and my Great Uncle Enoch, remained in Ukraine and were murdered in the Holocaust.
It’s particularly gratifying to hear comments from those of you who were inspired by my story to share your own family heritage with your heirs. As an example, Bob Semple replied: “Your comments on knowing your family heritage are spot on. I am making sure my family knows our heritage.”
I cannot overstate the importance of preserving family history to pass down to future generations. Luther King’s response to me reinforces this message: “I could not agree with you more regarding the importance of preserving family heritage and building pride and respect around it. Families we have worked for that have stressed their heritage, as a general rule, hang together and have high self-esteem.” Passing down that history, especially stories of resilience, proves enormously strengthening to kids when facing obstacles of their own.
Many encouraged me to continue sharing my personal stories, so at your urging, I’ll do a bit more of that. My hope is to continue inspiring people to do the same. Every family has its own stories. I urge you talk to your relatives and uncover those stories, then write them down to preserve them for future heirs.
Soon after my Zaidy Eliezer arrived in the US, he spotted a young man at synagogue services, and invited him home to join the Weinstock family for Shabbat dinner. That man was Meyer Oberstein, a recent immigrant from the town of Tiktin in Czarist Russia (later Poland). It was love at first sight between Meyer Oberstein and Pauline Weinstock, and they soon married.
My grandfather Meyer Oberstein’s story is also miraculous. Meyer was nine years old when World War I broke out, and the Jewish towns and villages around Tiktin suffered great danger, dislocation, and starvation. As a young boy, Meyer was out one night after curfew trying to find work to earn money to help feed his family. He was caught by Russian soldiers who lined up a firing squad to shoot him. Then a miracle occurred. An old Russian commissar with a beard rode up on a donkey and asked why they were going to shoot the boy. The Russian soldiers responded that little Meyer was possibly a German spy. The old man told them to let Meyer go, that he was only a kid and not a spy. That is how close my grandfather came to death.
Hitler’s goal was to kill all Jews, and indeed he did kill one-third of the world’s Jews in the Holocaust. The best victory we can now have over Hitler is for more Jews to be born, perpetuating the Jewish people. We cannot bring back the lives lost, but with every new generation of Jews, we are resolving that Hitler did not win.
Fate brought Meyer from Poland and Pauline from Ukraine to Montgomery, Alabama, where they married and had four children, including my mother Elsie. Meyer and Pauline were Generation 1 for our family in America. My mother Elsie and her three siblings are Generation 2. My brother Irwin and I, along with our 16 first cousins, are Generation 3. My children Adam and Elizabeth, along with their cousins (numbering nearly 100), are Generation 4.
So where does my oldest grandchild Stella fit into this story? In the family tree that starts with Meyer and Pauline, the first member of Generation 5 is Stella Savetsky, born nine years ago to our daughter Elizabeth and her husband Ira. Generation 5 will eventually number in the hundreds, and Stella will always have the distinction of being the first member of that generation. Stella’s life has a purpose. Stella represents the continuation of the Jewish people and our resilience. We say in Hebrew, L’dor Vador, from Generation to Generation. Going all the way back to Moses and the children of Israel, Stella’s life is proof that the unbroken chain continues!
Marvin E. Blum
Starting a fifth post-Holocaust generation in the Blum family when Stella (in her father’s arms) and later Juliet (in her mother’s arms) became links in an unbroken chain to perpetuate the Jewish people. Pictured left to right: Adam Blum, Laurie Blum, Stella Savetsky, Ira Savetsky, Elizabeth Savetsky holding Juliet Savetsky, Marvin Blum, and proud great-grandmother Elsie Blum.
I Am Ukrainian
March 15, 2022
As part of our Family Legacy Planning series, we have stressed the importance of preserving family heritage. Statistics show that children who know more about their ancestors grow up with a higher self-esteem. Moreover, knowing stories of ancestors who overcame obstacles gives heirs confidence they too can be resilient when hard times strike.
In my own family’s mission to learn more about our past, I have discovered some powerful revelations. All four of my grandparents immigrated to the United States from Eastern Europe to escape the Holocaust. Many of my ancestors descend from Ukraine, from a town they called Polnoa, now known as Polonne or Polona. Given today’s war in Ukraine, I feel a strong solidarity with the Ukrainian people.
My family’s life in Ukraine was difficult. Jews were persecuted by the Czar. Our “Zaidy” (the Yiddish word for grandfather) even had one eye poked out in a vicious pogrom against the Jews. My great-grandfather Eliezer Weinstock (“Zaidy”) was among the lucky few who made it to America. He left behind all of his possessions except “the knowledge between his ears,” prompting him to say: “What you put into your mind, no one can take away from you.” Hence, our family put an emphasis on education and giving your all in a commitment to lifelong learning.
I always thought all of Zaidy’s family made it to America. I was shocked recently when our longtime paralegal Becky Samons made a hospital visit to my mother and asked her if she lost any family in the Holocaust. I expected her to answer “no” but, for the first time I learned, the answer was “yes.” Zaidy’s two oldest children, Elke and Enoch, were both married and unable to afford passage to the U.S. They remained behind and became victims of Hitler’s mission to exterminate all Jews. My mother recounts that she and her grandmother shared a bed, and their nightly prayers were that Elke and Enoch were still alive. But, they were never heard from again.
My one-eyed Zaidy never learned English, forever clinging to Yiddish, his mother tongue. In his late years, he went before an Alabama judge to apply for U.S. citizenship. Though unable to pass any test in English, the judge waived the formal requirements and proudly declared him a United States citizen, saying anyone who’d endured his plight was worthy of U.S. citizenship.
I am proud to descend from Ukrainian Jews who instilled in me values of family, education, and leading a productive and spiritual life. I am now the proud grandfather of five grandchildren. When time came for me to choose the name my grandchildren would call me, I was honored to select “Zaidy” as my name, a tribute to my Zaidy Eliezer Weinstock. Without question, being “Zaidy” will always be the most important part of my identity.
Marvin E. Blum
Marvin Blum’s “Zaidy” Eliezer Weinstock, a Ukrainian who lost an eye in a czarist pogrom against Jews.
Business Succession Planning: Not Every Family Has an Elsie
March 1, 2022
I have a confession to make. In last week’s Family Legacy Planning email, I identified “business succession planning” as the most neglected area of estate planning. I grew up in a family business. Here’s my confession: our family also neglected business succession planning. There, I said it. Sometime the cobbler’s own shoes need attention.
As it turns out, in failing to plan for the transition of our family business, we are in the company of millions of others. Consider these statistics: 90% of American businesses are family-owned or controlled, yet less than one-third of those businesses have a succession plan. The family is left unprepared when an unexpected event occurs, such as the death of the owner. That’s what happened when my brother Irwin died. Irwin ran our family business, and when he died only two weeks after his cancer diagnosis, we were caught off guard. Fortunately, we had a savior—my 86-year-old mother Elsie emerged from retirement and, over the course of a year, single-handedly shepherded the business through to a successful conclusion. We were fortunate she had the skills and strength to rescue us. There was no one else besides her who knew the business and could have done what she did. Had it not been for my mother, we’d have been in desperate shape.
But not every family has an Elsie. I urge all business owners to learn from our story and have a succession plan in place. That way, if you’re caught off guard and don’t have an Elsie, your family will know what to do.
Here’s the story of our family business. When I was an infant, my father Julius started our family business. It wasn’t glamorous. It was an industrial café in Fort Worth’s meat packing district. We opened before 5:00 a.m. and served meals to the packing house employees. It wasn’t air conditioned, and our customers came straight from the area killing floors, boning rooms, and rendering plants—covered in blood-stained work clothes. The sight was one thing; the smell was even harder to imagine. I grew up working alongside my parents and brother from the time I was a mere toddler—clearing tables, washing dishes, cooking, and (as soon as I could add) working the cash register. That business gave me an education unlike anything my friends and I learned at school. It was hard work, but it provided us an honest living. My father used to say: “If you take care of your business, it will take care of you.” Indeed, that was true.
As I said in last week’s email, like so many business owners, my parents lived and breathed their business as if was like another child in the family. That day’s business was the topic of conversation at dinner every night. I understand and respect how people become so attached to their businesses, all the more reason to plan for the continuity of that business when the day comes the founders are no longer there to run it.
Over the years, Blum’s Café gradually morphed into J. Blum Co. Meat Packing Supplies. We started selling the workers knives, gloves, rubber boots, hard hats, frock coats, and all the other things meat packers use in their trade. Then we expanded into selling those supplies to meat packing businesses. I continued working in the business throughout my school years. Motivated by that school of hard knocks, I went full force into my studies and opted to become a CPA/tax lawyer. But my brother Irwin stayed on in the family business. When my father died and my mother retired, Irwin ran the business. Irwin was a dynamo—working like a machine, running every aspect of the business and keeping most it in his head. When he died, the only one who knew what was in Irwin’s head was my mother. In her mid-80’s, Elsie jumped right in with full force and took over. She’s a miracle woman.
Here’s the moral: Don’t depend on an Elsie to appear out of the blue and rescue your family business if the owner is suddenly gone. In the coming weeks, I’ll cover the steps to take in creating a business succession plan. And in the spirit of my confession, I’ll close with the adage: Do as I say, and not as I did.
Marvin E. Blum
The Blum family matriarch, Elsie Blum, surrounded by loving family. A business dynamo in her 80’s, Elsie single-handedly managed the family business transition.
The Most Neglected Area of Estate Planning
February 22, 2022
In a radio interview, I was once asked “What’s the most neglected area of estate planning?” Without hesitation, I replied: “business succession planning.”
Last week’s email on prenup planning referred to Jon Moore’s article in Family Business magazine entitled “In a Divorce, Who Gets What?” In it, Moore emphasized the importance of advance planning, so family businesses survive divorce and/or death. He stresses the concept of “integrated planning,” coordinating all the puzzle pieces: estate planning, disaster planning, asset protection planning, and business continuity planning. It takes more than hope and luck for a business to transition through major family changes and disruptions, especially the death of a founder. It takes careful planning.
Most business owners have a strong emotional connection with the business they created, almost as if it’s another child. They care what happens to the business after they’re gone. They have a keen interest in building a sustainable business that passes down as a meaningful legacy to future generations. Given the aging demographic of many baby boomer business founders, there is an urgent need to plan for what happens WHEN, not IF, the founder is no longer running the business. Family business owners are often so emotionally tied to the business that they have a hard time imagining the business without them. They believe they are indispensable. But as Charles de Gaulle, former president of France, famously said: “Cemeteries are full of indispensable people.”
When it comes to business succession planning (also known as business continuity planning or business transition planning), there are no easy solutions or fill-in-the-blank forms. The hardest part is to get started. Here’s a suggestion for the first step: call a meeting of those most familiar with you and your business and designate them as your planning team. Choose from among your CPA, attorney, banker, financial advisor, life insurance professional, family counselor, and other key stakeholders. Bring your planning team to the table to start the conversation. They will gradually help you develop a succession plan that makes sense for your business and your family. Then, they will guide you through the steps to implement the plan. Don’t try to go it alone.
When the time comes to develop the plan, it really boils down to three choices in the toolbox:
- Transfer the business to family members
- Sell the business to inside parties (people within the business)
- Sell the business to an outside party
In coming emails, we’ll explore more about the business succession planning process, and dive into each of these options. The Blum Firm would be honored to partner with you to help you achieve a successful continuation of the business legacy you worked so hard to build.
Marvin E. Blum
Addressing the “What If’s” Before Saying the “I Do’s”
February 15, 2022
We continue this week with our Family Legacy Planning segment on “the year of the wedding.” As mentioned last week, much of the goal of protecting family assets can be achieved outside of a prenup agreement through a “prenup alternative.” A prenup alternative utilizes irrevocable trusts and/or entities to protect assets. By carefully using these common estate planning tools, you can convert what would’ve been “marital property” into “non-marital property,” an important distinction.
All assets benefitting a Texas married person fall into one of two categories: marital property and non-marital property. Within the category of marital property, there are two sub-categories: community property and separate property. Separate property consists of assets owned before marriage or acquired during marriage by inheritance or gift. All of a spouse’s other assets, including income received from separate property, are community property. There is a presumption that all assets are community property, barring clear and convincing evidence that an asset is separate property. When separate and community are commingled, the commingling generally results in the assets becoming community. When a family court divides community property, it doesn’t necessarily divide it 50/50. The court can make a “just and right” division and award more than one-half to a spouse, taking into consideration equitable factors. One of the factors that a court can weigh is whether one of the spouses has more separate property than the other. So even though separate property cannot be awarded to the other spouse, it is still on the table for consideration and can impact the way a court divides the community property. On the other hand, non-marital property is not on the table for consideration in a divorce settlement.
Assets owned by a carefully drafted irrevocable trust are non-marital property. Ideally, parents will direct that all gifts and assets passing at death go to such a trust for their child. Single adults who have already accumulated assets in their own name can transfer assets to certain “self-settled” non-Texas trusts or can sell assets to a 678 Trust. When assets are transferred to a self-settled non-Texas trust or sold before marriage to a 678 Trust, the assets in the trust will continue to be non-marital property, even as they grow. If the assets were sold for a promissory note, the note will be separate property. However, the note will be frozen in size and is the type of asset not susceptible to being commingled. Irrevocable trusts are far less likely than prenups to be subjected to legal challenge. Legal precedent tends to favor respecting the integrity of the trust. Furthermore, unlike a prenup where both future spouses are involved and have to sign the document, a trust is easier on the relationship since the future spouse plays no role with the trust and needn’t sign anything with respect to the trust.
Another prenup alternative is to transfer assets before marriage into an entity, such as a limited liability company or limited partnership. In Texas, although a spouse’s outside ownership interest in a partnership is marital property, assets owned inside a partnership, as well as income earned but undistributed, aren’t divisible upon divorce. Contrast this with income earned on separate property that was not placed inside an entity or trust. Income on a Texas spouse’s separate property is community, whereas income accumulated in the entity or trust is non-marital property. It’s easy to see the substantial benefits prenup alternatives can provide.
Can you achieve all the protection you need through prenup alternatives and avoid the need for a prenup? There are certain protections that still require a prenup, but perhaps it could be a scaled-back prenup. Those entering into second marriages may need to address obligations to former spouses. A child from a prior relationship requires special planning to diminish the risk of later friction between the child and a stepparent. If a spouse is in a high-liability-risk profession, a prenup can provide an added layer of protection for the other spouse’s property. The prenup can also specify how assets are divided when a marriage ends, whether by divorce or by a spouse’s death. In addition, if assets were transferred before marriage to an entity, once the entity makes distributions, the distributions are generally treated as community property. A prenup can override that treatment and characterize those distributions as separate property. Therefore, many do both a prenup and a prenup alternative (sort of a belt and suspenders approach). However, if the primary goal is to only protect certain family legacy assets, sufficient protection can often be achieved by only doing prenup alternatives.
In the Family Business magazine article “In a Divorce, Who Gets What?,” Jon Moore discusses the Amazon divorce of Jeff Bezos and MacKenzie Scott. Scott received a 4% stake in Amazon, valued at $38 billion, but agreed Bezos could retain voting control over her shares. Moore describes a three-step process to protect the shares of stock in a family corporation: (1) put title to the shares in a spouse’s name as separate property (a “belt”); (2) declare in a prenup that the family business is separate property, including any future income or growth in value of the business (“suspenders”); and (3) hold the business in a corporation with a Shareholders’ Agreement specifying that a divorced spouse cannot be a shareholder of the corporation (a “second belt”). Many family corporations have a buy-sell agreement providing that if a divorcing spouse acquires a right to stock, that spouse must sell the stock back to the family at a pre-agreed price. Moore adds that another tool is to transfer the stock to an irrevocable trust, as a prenup alternative, as we suggested above.
As is evident, there are multiple techniques and considerations in deciding how to best protect family assets. It’s not a “one size fits all.” However, with the grim statistic that about half of first marriages in the United States end in divorce, pre-marital planning to protect family assets is the responsible thing to do. The Blum Firm would be honored to help you weigh all the options and decide what is best for your family.
Marvin E. Blum
Prenups: How to Achieve the “Good” But Avoid the “Bad” and the “Ugly”
February 8, 2022
In this week’s Family Legacy Planning email, we continue with the theme that we’re in “the year of the wedding.” Over the last two weeks, we’ve focused on the impact of marriages on a family’s human capital. We identified “hot button” issues related to wedding planning and bringing a new member into the family. If not handled carefully, those hot buttons can create fires in family relationships and disturb the emotional well-being of family members, setting a family’s human capital ablaze. As estate planners, our mission is to help families steer clear of those fires and preserve healthy, harmonious relationships.
When a couple plans to marry, there is a tension between preserving harmony at all costs versus addressing necessary financial matters. That tension can make you feel like you’re walking a tightrope. Though it’s tempting to avoid the topic, protecting family assets is an important part of estate planning. Families work hard to create financial security. There is also an emotional attachment to certain family assets, such as a family business, heirlooms, or other legacy assets. It’s a valid goal to preserve those assets and protect them from division by a family court upon the unfortunate incident of divorce.
The purpose of a prenuptial agreement (a “prenup”) is to clarify certain items in order to prevent (or at least diminish) disputes down the road. What can a prenup do? Prenups can clearly identify the separate property assets each party brings into the marriage. Under Texas law, income earned on those assets will be community property. However, a prenup can override that law and provide that income earned on separate property assets will remain separate. Prenups can also address how to treat wages, retirement plans, debts, financial responsibilities, tax filings, homestead rights, and division of assets/spousal support upon death or divorce. These clarifications can be especially critical if either spouse comes into the marriage with children, in order to reduce the risk of later disputes between those children and a surviving stepparent. A prenup can even address non-financial issues such as child-rearing, religious upbringing, division of household responsibilities, etc.
As wedding hot topics go, it’s easy to see that a prenup may well be the hottest. So let’s explore some prenup tips to help keep it from becoming a potential tinderbox.
- Start the prenup process early, long before the wedding day.
- Complete the process well in advance of the wedding.
- Each party is well-advised by his or her own attorney.
- Let the lawyers do as much of the talking directly with each other as possible.
- Provide a full disclosure of each party’s finances, or get an informed, voluntarily-signed waiver.
- Note that a prenup is about more than property division upon divorce; it also can protect one spouse’s assets from claims that might arise against the other spouse, such as an auto accident or a medical malpractice claim.
- Avoid sharp dealing, overreaching, harsh negotiation.
- Establish a “family policy” that all marrying couples have a prenup, ideally long before anyone gets engaged.
- Try to achieve as many property protection goals as possible through a “prenup alternative.”
A prenup alternative involves the use of irrevocable trusts and entities to protect assets. In next week’s email, we’ll dive into prenup alternatives and explore how estate planning can convert what would’ve been “marital property” into “non-marital property.”
We are not suggesting that a prenup can be completely painless. We are not naïve; prenups are not a romantic topic. However, by following these best practices, our mission is to help you keep the temperature cooler and keep as much focus as possible on the loving relationship.
Marvin E. Blum
Laurie and Marvin Blum at their wedding 43 years ago—white lace, promises, and so much to celebrate!
Tips to Onboard In-Laws into Your Family
February 1, 2022
As pointed out last week, we’re in the “year of the wedding.” Our focus last week was on the risks weddings pose on protecting a family’s human capital. Human capital is one of the five key components of a family’s wealth (along with intellectual, social, spiritual, and financial capital). Human capital consists of the individuals who make up a family, celebrating each one’s personal identity, self-worth, and well-being. Marriage adds a new member to the family, so it instantly impacts the make-up of a family’s human capital. If you engage in a thoughtful process to welcome in-laws, their impact on the family’s human capital can be positive. But if you’re not careful, bringing a new in-law into the family can be disruptive to the family’s human capital.
Put yourself in the shoes of the new son-in-law or daughter-in-law. Most of us have been there at some point. Remember how it feels. There’s no getting around the fact that in-laws grew up in a different home, with a different set of rules, and on some level, different values. It’s natural for the new in-law to feel like an outsider. When the family makes efforts to welcome the new member and make them feel like a valued member of the team, you improve the odds of successfully incorporating that in-law into the family. Taking steps to strengthen the bond with in-laws pays enormous dividends, especially when you consider that they will be parenting the next generation of your family. The continued success of your family’s human capital depends on it.
When I started out as an estate planning lawyer over 40 years ago, the trend was toward secrecy and a more closed relationship between the older generation (Generation 1 or G-1) and younger generations (G-2 and G-3). This was especially true when it came to money and a family’s business affairs. This was even MORE especially true between G-1 and SPOUSES of G-2. The world is a different place today. No matter how hard one may try, there is little to no privacy. We need to embrace the reality that G-2 and G-3 (and their spouses) have ways to find out much of G-1’s business. What’s also true is what they don’t know, they’ll make up. Such behavior fuels misinformation and a communication breakdown. Rather than hide from today’s expanded access to information, the smarter course is to accept it and adopt an open approach that carefully manages the communication flow.
Along with the new reality of more “open” rather than “closed” relationships, there is also a new style of estate planning. The “new age” of estate planning is holistic. It goes way beyond just drafting Wills. The Blum Firm has expanded our offerings to help families establish a family governance structure. Such a structure contains policies to foster strong family bonds, particularly with new in-laws. In particular, your family governance system will oversee a family meeting process that includes these elements:
- Adopting an orientation process for in-laws and for kids reaching adulthood (multi-step, not through a firehose, so as not to overwhelm)
- Gradually educating family members on the family’s business, estate planning, and wealth (all five capitals, not just financial)
- Regularly reaffirming the family mission statement, values, and vision, allowing for new input and periodic updating
- Creating an avenue for continually updating the family on new developments and important decisions
- Establishing open channels of communication, feedback, and idea sharing
- Procedures for group decision making, voting, and resolving conflicts
- Planning shared experiences (which includes having fun together!) to build relationships
Granting in-laws a backstage pass to the inner workings of the family will go a long way in making them an insider instead of an outsider. Rather than have them learn through haphazard methods, guesswork, and “pillow-talk” with a spouse, create a thoughtful structure. The Blum Firm would be honored to help you create a system to manage the communication flow. One final tip: This is family, not business, so we know you’ll deliver it with love.
Marvin E. Blum
Weddings are a time of great celebration, including welcoming a new member into the family. This was the night we celebrated Adam bringing Brooke into the Blum family.
It’s the Year of the Wedding
January 25, 2022
I was visiting with close friends recently about their daughter’s upcoming wedding, and they referred to an article they’d read describing 2022 as “the year of the wedding.” Due to so many postponed weddings during COVID, the 2022 calendar is jam-packed with weddings. Question: What do weddings have to do with estate planning and family legacy planning? Answer: A lot!
When I was studying tax law and estate planning at UT Law School over 40 years ago, I never imagined I’d one day be advising families on so many issues pertaining to marriage. I’ve written on the topic, I give speeches on the topic, and I regularly advise clients on the topic.
The ties between marriage and estate planning are numerous. The most obvious has to do with trust and pre-nuptial (“pre-nup”) planning to preserve and protect family assets. But as a follow-on to last week’s email about protecting all 5 “capitals” (not just financial capital), my focus today is on the impact of marriages on human capital. As I elaborated last week, author Jay Hughes distinguishes between quantitative estate planning (to protect financial capital) and qualitative estate planning (to protect human, intellectual, social, and spiritual capital). Family “wealth” is comprised of all five capitals.
Hughes defines human capital as the individuals who make up the family, including each one’s physical and emotional well-being. It’s easy to imagine how a stressful wedding scenario would disrupt family relationships and the emotional well-being of family members. Yet even in the most harmonious situations, wedding planning puts stress on family relationships. Healthy relationships are the glue in maintaining a family’s stability and sustaining a family’s wealth long-term. The estate planner can be an objective voice of reason when challenges emerge.
Consider the impact these hot-button issues could have on family ties:
- Cost of the wedding—Establish a budget (and then if you’re realistic, you should secretly double it in your head). The movie Father of the Bride warns how tempting it is to bust the budget. Caution against the wedding becoming bigger than the marriage. When our daughter Lizzy married, we asked her to identify her top three priorities. She chose music, photography, and a fairy tale Manhattan venue. We kept all other costs under control.
- Determine who pays for what—Bride’s family, groom’s family, or the marrying couple. A wedding is a major financial endeavor akin to two strangers entering into a business partnership. Some Orthodox Jews adhere to the FLOP rule: the groom’s side pays for Flowers, Liquor, Orchestra, and Photography. Clarify upfront what costs each will cover.
- Who calls the shots? Though some are tempted to follow the other “Golden Rule,” a wedding isn’t necessarily a situation where “he who has the gold rules.” With the stability of a family hanging in the balance, the stakes are much higher.
- Invitation list—Do the math. A 400-person wedding doesn’t mean the bride’s parents can invite 400 guests. That’s 200 couples, perhaps 100 for the bride and 100 for the groom. After inviting family members, the bride’s friends, and the groom’s friends, parents will likely be left with a small number of invitations for their friends.
- Pre-nup planning—As hot topics go, this may be the hottest. The Blum Firm has substantial expertise in this area. Be on the lookout for information in upcoming emails about pre-nups as well as “pre-nup alternatives.”
Above all, remember that “post-wedding” matters more than “pre-wedding.” Set aside any hard feelings and support the new couple. They will be parenting the next generation of your family. Embrace your new in-law and welcome him or her to the family. In coming weeks, we’ll give tips on onboarding in-laws.
Stay tuned for more wedding wisdom in this “year of the wedding.”
Marvin E. Blum
Weddings are an important part of a family’s legacy. Marvin Blum’s daughter Lizzy observes as her husband Ira preserves the Jewish tradition of breaking a glass, reminding us of the fragility of life and the care it takes to protect relationships.
Family Wealth: How to Keep “It” in the Family
January 18, 2022
Over the last few weeks, I have drawn lessons from my brother’s death to urge everyone to do an estate plan check-up. As I emphasized last week, in reviewing your estate plan, I recommend you do so not only with an eye for how it performs financially, but to consider how it performs in all five of the capitals: Human, Intellectual, Social, Spiritual, and Financial.
To describe the five capitals, I will draw from the teachings of my hero Jay Hughes in his most recent book, Complete Family Wealth. Hughes explains that in the title of his earlier book, Family Wealth: Keeping It in the Family, the word “it” is not money. “It is the family’s qualitative wealth—its human, intellectual, social, and spiritual capital—in addition to its quantitative, financial capital.” Financial is only one-fifth of the wealth package. He quotes a grandmother who recognized the distinction when she said, “Our family has always been rich, and we’ve sometimes had money.”
To help you assess how your estate plan measures up on all five components of wealth, here’s how Jay Hughes defines them:
- Human Capital: Each family member’s physical and emotional well-being, including each one’s ability to find meaningful work.
- Intellectual Capital: The knowledge gained through life experiences, whether learned from academic, career, or artistic achievements, including an understanding of family finances.
- Social Capital: The relationships family members have with each other and with their communities, including giving of your time, talent, and treasure to society.
- Spiritual Capital: Understanding that as a family, we share an intention (or shared dream) that transcends our individual interests, whereby we embrace humility, gratitude, traditions, as well as whatever a family’s religious beliefs may be.
- Financial Capital: A family’s money and property, different from the other capitals, yet important in helping a family cultivate those other four qualitative capitals.
As you review your estate plan, ask if it reflects the family’s mission. Does it include elements to cultivate all five of the capitals? Consider ways to beef it up, if necessary, to foster mentoring of heirs, education experiences, philanthropy, preserving a family’s values and dreams (perhaps as expressed in an “Ethical Will” or Legacy Letter to your heirs).
My wife Laurie has a beautiful, innate understanding of the distinction between financial wealth and qualitative aspects of wealth, reminding me that “money’s not the right way to keep score in life.” I’m a lucky fellow to share life with someone who gets “it.” Dennis Lee Simon got “it” too. My friend John Hodge carries with him Dennis Lee Simon’s obituary, which I’m sharing here. When you read Simon’s obituary, you’ll see that in his short 34-years, he discovered that success in life isn’t about money, but about family, relationships, and faith. As he put it, “Nothing else makes much sense.”
I’ll close with one more story of a friend of mine who also got “it.” In paying a farewell visit to say goodbye to my dear friend Ray, he unwittingly shared the concept of wealth being both quantitative and qualitative. Ray’s final words to me: “Can you believe I amassed a $15,000 IRA? I never thought I’d have that kind of money. I’m also grateful that my entire family gathers here every Fourth of July. I hear some families don’t get along with each other and do things like that.” Such simple words, yet so much wisdom is packed into them.
The Blum Firm would be honored to help you create an estate plan that keeps “it” in the family.
Marvin E. Blum
Some Final Reflections From My Brother’s Death
January 11, 2022
When I began writing these weekly Family Legacy Planning posts over a year ago, I had no idea where this would lead. The feedback has been extremely rewarding. I have always loved to teach, and my plan was to give guidance based on my 44-year career as an attorney and CPA. What I discovered was that the posts where I shared personal stories elicited the most reaction. People encourage me to share my personal reflections. That shouldn’t surprise me. After all, estate planning is a deeply personal endeavor.
A few weeks ago, I opened the door into the topic of what I learned from my brother Irwin’s sudden death from pancreatic cancer. Surprisingly, I discovered I had suppressed a lot of my grief. Sharing this has been therapeutic for me. As my best friend Talmage Boston comforted me: “Some things in life are extremely hard to endure—but they deepen our character and our insights about life.” So true. At your urging, I will dive a little deeper into those insights.
Irwin’s death had a profound impact on me. As an estate planning lawyer, I was accustomed to dealing with death. However, the concept was always somewhat abstract for me. Irwin’s death made it real. In fact, I divide my law practice into two timeframes: (1) before Irwin died, and (2) after Irwin died.
More than anything I’d ever learned in school, seminars, or law practice, experiencing a loved one’s passing made me realize how much estate planning matters. I recently shared the observation that estate planning documents are not just paper. The structures and processes these documents create impact lives. By carefully crafting a plan, you can enrich lives. You can create responsible, empowered heirs and not trust babies. Such a plan fosters a powerful legacy that lives on long after you’re gone.
I’ve heard others sum up the value of estate planning in various ways:
- My mentor Tom Rogerson of GenLegCo teaches: “Failing to plan is planning to fail.”
- Planning advisor Kate Flume emphasizes: “Thoughtful estate planning trumps investment returns.”
- My TIGER 21 chair Jack Mueller asserts: “The greatest investment return comes from doing proper estate planning.”
- For investors fearing a bear market, the worst bear market occurs 9 months after death by unnecessarily paying a 40% estate tax that could’ve been avoided with proper planning.
As I’ve shared repeatedly in this email series, the returns from good estate planning are not only financial. In fact, financial rewards represent only one of the five capitals, summarized brilliantly by Jay Hughes in Chapter One of Complete Family Wealth: Human Capital, Intellectual Capital, Social Capital, Spiritual Capital, and Financial Capital. A thoughtful estate planning generates a legacy for your family in all five capitals.
I’ll close by once again thanking Irwin for teaching me the real value of my career, as I aim to guide clients in planning not only their estates but also their legacies. Irwin lives on in my heart. I cherish our childhood memories, like gathering discarded Christmas trees from all the neighbors’ yards to build a fort in our backyard, then dumping a mass of Christmas trees on our front curb (imagine the image as the only Jewish house in our neighborhood!) As the picture reflects, Irwin’s with me when I hike in the Rocky Mountains. He’s with me when I savor a slice of chocolate cream pie (his last enjoyable bite). He’s with us when we sit on the bench his wife Lea Ann dedicated in his memory at Airfield Falls in Fort Worth, looking out on a majestic waterfall that he and Lea Ann loved. Irwin lives on.
Here’s encouraging everyone to take a good honest look at your estate plan and imagine it in action after you’re gone. The Blum Firm would be honored to help you pass down success in all five capitals.
Marvin E. Blum
Marvin (left) and Irwin Blum hiking to Lake Haiyaha, only a few months before Irwin died. Irwin lives on in every Blum Rocky Mountain hike!
New 2022 Estate Planning Numbers—Time for a Tune-Up
January 4, 2022
Over the last two weeks, I shared lessons learned from my brother’s unexpected death, including the need to take your estate on a “test drive” to see how it runs if you pass away today. All too often, we discover surprises that can be fixed if we catch them before death. Expanding on that theme, New Year’s is the ideal time to do an estate planning check-up.
With the arrival of 2022 comes the opportunity to take advantage of an increase in some important numbers:
- The lifetime estate/gift tax exemption is now $12,060,000 per person, an increase of $360,000 per person. A married couple who used their full exemptions prior to 2022 can now transfer an additional $720,000 out of their estates. Doing so saves the 40% estate tax on the amount transferred, plus saves the 40% tax on any growth in those assets between now and the date of death.
- The annual exclusion for gifts rises from $15,000 to $16,000. You can now make annual gifts of $16,000 to anyone and remove those assets from your estate without having to eat into your lifetime exemption. A married couple can join together and make gifts of $32,000 to as many people as they wish.
I want to share an article I wrote that was recently published, as it’ll be helpful in doing an estate planning review. The article is geared toward advisors, but it also speaks to each of us as we dust off our estate plans. The article is entitled “Estate Planning for 2022: Questions to Ask Your Clients,” and it addresses these ten questions:
- Do you own anything in your name (other than retirement accounts)?
- After you’re gone, will your retirement assets be protected?
- If you died right now, would your children’s inheritance become divisible upon a divorce?
- Have you taken advantage of the doubled estate tax exemption?
- Can you have your cake and eat it too?
- Do you have any low basis assets?
- Do you love your grandkids equally?
- Do you have a “red file?”
- Do you have a business succession plan in place?
- Are you worried an inheritance will ruin your children?
Here’s a link to the article. Please note that the explanation under question 4 refers to a $23,400,000 estate tax exemption for a couple, but as pointed out above, that number is now $24,120,000. Don’t forget that the doubled exemption sunsets in 4 years, so any exemption you haven’t used by December 31, 2025 declines by about $6,000,000 per person at the stroke of midnight. Cinderella’s coach will turn back into a pumpkin. Now is the time to “use it or lose it.”
The Blum Firm would be honored to help with your estate planning tune-up. May 2022 be a productive and fulfilling year!
Marvin E. Blum
The Blum family wishes you a joyful and fulfilling 2022!
Lessons from Irwin’s Death: Take Your Estate on a “Test Drive”
December 28, 2021
In last week’s Family Legacy Planning email, I revealed how my brother Irwin’s death was a wake-up call in so many ways. I shared how death often comes without notice. As I’ve shared before, not only do “you only live once” (YOLO), but also “you only die once” (YODO), so you have only one chance to get it right. The key message is to BE PREPARED and have your affairs in order. Death, especially when unexpected, is viciously hard on your family. Don’t make it even harder by leaving them unfinished business.
When a client dies, we immediately embark on the details of estate administration. We gather legal documents, learn how bank accounts are titled, find out the beneficiary of life insurance and retirement plans, and determine to whom everything passes. All too often, we discover surprises:
- A bank account or brokerage account that pays on death outright to an unintended person, instead of passing through the Will to a trust with built-in protections
- An outdated beneficiary designation that leaves life insurance or retirement assets to the wrong recipient
- Documents naming an executor, trustee, or guardian for your minor kids you wish you’d changed
- Bequests that should’ve been added or omitted
- Lack of instructions on how to distribute personal effects, which could have helped avoid some painful fights among heirs.
We usually discover these surprises within days of a loved one’s death. Had we only known before their passing, we could’ve easily and quickly fixed them. That brings me to my core message: by taking your estate on a “test drive,” you look at how your plan runs as if you passed away today. Now you have a chance to make things right. It puts you in the driver’s seat of your estate plan.
If your estate planning documents have been sitting on the shelf for a while, now’s the time to do a “pre-death audit” or test run around the track. Red flags on the course include the following:
- Documents drafted more than four years ago
- Significant life events, such as marriage or divorce, for you or your family members
- Serious health challenges
- Newborn children or grandchildren
- Bank accounts set up to “pay on death” or pass by “right of survivorship,” circumventing your Will.
The Blum Firm can help you perform the test run and then assist with any needed tune-up to your estate plan. This sounds like a good New Year’s Resolution to me.
Wishing you a New Year that’s happy and HEALTHY (and boy has that word taken on a new significance!),
Marvin E. Blum
Irwin (left) and Marvin (right) with mother Elsie Blum. Irwin’s untimely death teaches us lessons— be prepared, and do an estate “test drive” to make sure all’s in working order.
What I Learned From My Brother’s Death
December 21, 2021
At holiday time, our minds naturally turn to family, especially memories of times with loved ones no longer with us. While in this reflective mood, I want to share a story of my dear brother Irwin. Here are some lessons we can all learn from Irwin’s untimely death from pancreatic cancer:
- On your deathbed, your priorities shift to what really matters, and we realize all of the day-to-day “stuff” we worry about is just “stuff.”
- We don’t always have much (if any) warning of impending death.
- Estate planning documents are not just paper. They have a real impact on lives.
- After we’re gone, our legacy can live on in a very powerful way.
- Now is the time to do a “test drive” of your estate plan to make sure you’ve dotted all the i’s and crossed all the t’s.
Please indulge me to tell the story of Irwin’s passing. Here’s a guy who lived a model life of good health (no smoking, no drinking or drugs, exercised regularly, ate a healthy diet, not overweight). Irwin was rarely sick. One Friday evening almost five years ago, he called to tell us he thought he’d broken his foot. He was heading to a neighborhood clinic for an x-ray, lamenting that he’d soon have to endure the inconvenience of a cast on his foot. We urged him to go instead to a local hospital emergency room to meet an orthopedic doctor friend of ours. X-rays revealed that his foot was not broken, but the pain was coming from blood clots in his calf. Within hours, we discovered that there were blood clots throughout his body, emanating from his pancreas. We knew what that meant, having lost my father to pancreatic cancer 14 years before.
Irwin faced this diagnosis with the most amazing strength and courage imaginable. Doctors recommended no treatment, as the cancer was already too advanced, and Irwin went home with his wife Lea Ann and into hospice care. Irwin declined rapidly, but his spirit stayed strong. He even maintained his sense of humor, kidding with his buddies who surrounded his bed daily. His concern was never about himself, but about taking care of his loved ones. He wasn’t worried about his own health, but his focus was now on my health, aware that I have two close relatives (a father and a brother) both succumbing to pancreatic cancer. Doctors wanted to perform genetic testing on Irwin to be useful in assessing my own risk. Irwin held onto life just long enough for the kit to arrive so he could give his blood for my well-being. Only hours after giving me that gift, Irwin died. The journey from diagnosis to death was a mere two weeks. He was gone at age 65.
Words can’t begin to express my love and gratitude to Irwin. He gave so much, throughout his whole life, and his selfless act on his deathbed was just another example of the “mensch” he was. I was blessed with good news from both Irwin’s genetic testing and my own genetic testing. I still take every precaution and am enrolled in a program at UT Southwestern Medical Center aimed at early detection, should a problem arise. I am beyond grateful.
My message to everyone is to be prepared. It’s human nature to procrastinate when it comes to dealing with unpleasant things. At this holiday season, please accept a gift from Irwin. Let’s fight the temptation to postpone the things we need to do: express love, do things that bring you joy, and engage in planning to create a lasting legacy for those we will one day leave behind. Please allow me to suggest that your new year’s resolution list include an estate planning checkup. In the coming weeks, I’ll expand on the lessons learned from Irwin and provide more tips for that checkup.
Wishing all a joyful and meaningful holiday season,
Marvin E. Blum
Brotherly love—The Blum brothers: Marvin (left) and Irwin (right).
Checklist to Help Kids Stay Off Drugs
December 14, 2021
Last week’s Family Legacy Planning email contained a quote that stirred up attention. Statistics show that having regular family dinners actually reduces the risk of kids turning to drugs. This finding is based on research at Columbia University’s “Partnership to End Addiction,” founded by Joe Califano.
The 18-year research project studied the link between the frequency of family dinners and teens’ substance abuse. Kids who have dinner with their parents at least 5 times a week are far less likely to smoke, drink, or use drugs. The risk of addiction increases dramatically for teens who have fewer than 3 family dinners per week. Califano explains that “the magic that happens at family dinners isn’t the food on the table, but the conversations and family engagement around the table… Family dinners are the perfect opportunity when teens can talk to their parents and parents can listen and learn.” Columbia’s research is summarized in the White Paper “The Importance of Family Dinners VIII” available here.
It’s important to start family dinners while the kids are young. The research revealed that “a child who gets through age 21 without using illegal drugs, abusing alcohol or smoking is virtually certain never to do so.”
Of course, there are no guarantees. However, it’s hard to ignore these powerful research findings. In her book How to Make Your Family Business Last, Mitzi Perdue provides this checklist for helping kids avoid substance abuse:
- Be a good example.
- Keep dangerous prescription drugs out of their reach (almost half of addictions start from the family medicine cabinet).
- Teach kids early on that you consider substance abuse to be morally wrong and stupid.
- Choose a middle school and a high school that enforces a drug-free policy.
- Attend religious services (kids who do are 3 times less likely to smoke and drink).
- HAVE DINNER TOGETHER at least 5 times a week.
I once attended an international conference for large Family Offices. They covered investing, tax planning, estate planning, educating heirs, but the one topic that received the most attention shocked me. It was substance abuse. Almost every family deals with addiction at some level. Consider adhering to these tips, especially the idea of regular family dinners. It’s certainly good food for thought, and perhaps the makings of a good New Year’s resolution!
Marvin E. Blum
The Blum family enjoying a Sunday brunch. Research shows that bonding at frequent family meals has lasting benefits, even helping keep kids off drugs.
What Are Your Rose and Thorn This Week?
December 7, 2021
Two weeks ago, our Family Legacy Planning series focused on 20 questions for your Thanksgiving table talk, prompting last week’s email to continue family story telling during holiday meals. The volume of feedback from those two emails tells me there’s a great level of interest in telling family stories. At your urging, I’m diving deeper into the topic of family table talk.
Robyn Fivush explores what’s so special about storytelling at the dinner table in her study The Importance of Family Dinnertime. “The dinner table is the perfect time for a busy family to come back together at the end of the day, to tell each other stories of their daily experiences and to re-connect as an emotionally bonded family.” Fivush breaks the stories into two categories: (1) “Today I…” stories where each tells something that happened during the day, and (2) Shared Family stories recalling favorite memories of a shared family experience, such as a trip or outing. Both are important, as every family member at the table can participate, regardless of age.
Fivush researched these conversations at the Family Narratives Lab and came to this surprising conclusion: “Adolescents from families that told more stories, both ‘today I…’ stories and shared family stories,… showed higher self-esteem, higher sense of social competence, higher academic competence, and showed few internalizing (anxiety, withdrawal, depression) and externalizing (aggression, substance abuse) behavior problems.” Why is that? Children from story-telling families build tighter family bonds, feel emotionally closer to family, and develop a sense of security and belonging.
Most of the stories are positive, but even talking about negative or challenging experiences is valuable. Fivush continues: “Use this as an opportunity to understand your children’s feelings, and to help them gain some perspective on these difficult events. Sharing sad events helps your children understand they are not alone.”
In the Blum family, we have discovered a way to expand on the “today I…” theme that works for family members of all ages. At the weekly Shabbat dinner table, each person gives their “rose” and “thorn” highlight of the week. We start with the youngest (even including the babies, whose older sisters answer for them), and keep going till we get to the old man Marvin. Everyone gets a voice at the table. My son-in-law Ira modified the rules recently to prevent the negative experiences from overpowering the positive ones. In order to announce your thorn, you have to first give THREE roses. You’d be amazed at the wisdom we all learn from these weekly highlights. Perhaps it would enrich your family experience too, while also giving everyone at the table an uninterrupted chance to talk. Why not give it a try!
Marvin E. Blum
Preparing Chanukah mealtime at the Savetsky home where each member of Marvin Blum’s daughter’s family can share three “roses” and a “thorn.”
Holiday Season—The Perfect Time for Storytelling
November 30, 2021
Thanks for the super feedback from last week’s email about the 20 question “Do You Know?” scale. That email generated the all-time best response in my Family Legacy Planning series. I used these questions at my own Thanksgiving table, and it prompted a terrific round of storytelling. The best way to teach younger generations about their family heritage is by telling stories. People forget statistics, but they remember stories for a lifetime. Dinnertime during the holidays is a perfect time to tell these family stories.
The New York Times columnist Bruce Feiler asserts: “The single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.” Author Mitzi Perdue concurs: “Stories tell us who we are and where we fit in… Families that spend time together and share their family stories are likely to be high-functioning families.”
Psychologist Marshall Duke explains: “There are heroes in these stories, there are people who faced the worst and made it through. And this sense of continuity and relatedness to heroes seems to serve the purpose in kids of making them more resilient. Ordinary families can be special because they each have a history no other family has.” Sharing stories of ancestors who conquered adversity gives a kid confidence that he too can overcome obstacles when (not if) they arise.
I’ll share a story from my own lineage that gives me strength. When my mother’s family was escaping Russia to come to America just prior to the Holocaust, her Aunt Rachel gave birth to a baby boy Morris during a stopover in Poland. Baby Morris was a Polish citizen; the rest were Russian citizens. When they arrived at Ellis Island, the quota for Polish citizens was full. Aunt Rachel, her husband Uncle Avrom, and baby Morris had to stay on the ship and go to Cuba. The rest of the family was admitted to the US. Aunt Rachel and her family made a good life in Havana until Castro came. Once again, they lost everything and even were forced to live in a small section of their home so strangers could occupy the rest of it. Years later after Uncle Avrom died, Aunt Rachel managed to escape to Miami, leaving everything she had behind for the second time in her life. But, Aunt Rachel made the best of it. Though elderly, she added English to the list of languages she spoke (Yiddish, Spanish, Russian) and made another good life for herself.
Knowing that I descend from survivors like Aunt Rachel helps me get through hard times. Every family has stories. The Emory University Family Narratives Project confirms that “family stories seem to be transferred by mothers and grandmothers more often than not and that the information was typically passed during family dinners, family vacations, family holidays, and the like.” These stories lead to “high levels of cohesiveness” and a strong sense of “intergenerational self,” which in turn leads to personal strength, moral guidance, increased resilience, and better adjustment.
During this holiday season, discover your own family narrative and share it with your loved ones.
Marvin E. Blum
A young Marvin Blum (center, standing) with family. Aunt Rachel (lower right corner) survived Hitler and Castro to make a better life in America after escaping both Russia and Cuba. Resilience!
20 Questions for Your Thanksgiving Table Talk
November 23, 2021
Here’s a suggestion for the conversation at your Thanksgiving table: use the time to discuss the “Do You Know?” scale. Arming your family with answers to these 20 questions reinforces family bonds and helps heirs become more resilient. This assertion is based on research by Dr. Marshall Duke and Dr. Robyn Fivush, psychologists on the faculty at Emory University, developers of the 20 question “Do You Know?” list.
This thesis was further tested and confirmed by Bruce Feiler, author of The Secrets of Happy Families. After years of research and interviews, Feiler arrived at this startling conclusion: “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem and the more successfully they believed their families functioned. The ‘Do You Know?’ scale turned out to be the best single predictor of children’s emotional health and happiness.”
Enjoy a lively and thought-provoking table conversation with the help of these 20 questions:
- Do you know how your parents met?
- Do you know where your mother grew up?
- Do you know where your father grew up?
- Do you know where some of your grandparents grew up?
- Do you know where some of your grandparents met?
- Do you know where your parents were married?
- Do you know what went on when you were being born?
- Do you know the source of your name?
- Do you know some things about what happened when your brothers or sisters were being born?
- Do you know which person in the family you look most like?
- Do you know which person in the family you act most like?
- Do you know some of the illnesses and injuries that your parents experienced when they were younger?
- Do you know some of the lessons that your parents learned from good or bad experiences?
- Do you know some things that happened to your mom or dad when they were in school?
- Do you know the national background of your family (such as English, German, Russian, Chinese, and so on)?
- Do you know some of the jobs that your parents had when they were young?
- Do you know some awards that your parents received when they were young?
- Do you know the names of the schools that your mom went to?
- Do you know the names of the schools that your dad went to?
- Do you know about a relative whose face “froze” in a grumpy position because he or she did not smile enough?
The Blum Firm wishes you a meaningful Thanksgiving celebration with your loved ones.
Marvin E. Blum
From their home to yours, Marvin and Laurie Blum wish you a meaningful Thanksgiving.
How Do You Choose What Causes to Support?
November 16, 2021
In last week’s email, I shared my views on the importance of philanthropy in estate planning. I described the estate planning process as a menu with a main course, appetizers, and a dessert. Not surprisingly, philanthropy is the “dessert” on the estate planning menu, after ordering a main course (for you and your spouse’s needs) and appetizers (to provide for your kids and other loved ones). There is a “two-fer” benefit to philanthropy, as it not only helps others, it also provides powerful “glue” in keeping a family unified as they come together to create a giving legacy.
I received feedback asking me to share tips on how to choose what causes to support. Lady Bird Johnson famously said she selected causes that “make my heart sing.” For her, that included beautification and wildflowers, especially along America’s highways. For Omaha businessman Walter Scott, Jr., good friend of Warren Buffett, his focus was on youth. “I have nothing against old people. I am one! But I believe society will get the most bang-for-the-buck if I invest in things that help us produce educated and productive citizens.” Hence, Scott was a major donor to the University of Nebraska.
I was asked to reveal my own causes. I share similar philosophies with Lady Bird Johnson and Walter Scott, Jr. I look for causes where my charitable dollars and volunteer hours not only make my heart sing, but they also “move the needle” and have a meaningful impact. As the photo reveals, I also have a personal passion for the arts, driven by my lifelong love of painting, as well as a passion for children and education. These priorities attract me to causes like the Fort Worth Symphony (where I was treasurer for 42 years), the Multicultural Alliance and its Camp CommUNITY, Texas Cultural Trust, Trinity Valley School, and Jewish Family Services.
I encourage you to find what “makes your heart sing.” I guarantee that you and your family will get back more than you give.
Tax Tip: 2021 is an ideal year for people considering a large cash gift to a public charity. Normally, the tax deduction for such gifts is limited to 60% of your Adjusted Gross Income (“AGI”), but for 2021 you can deduct an amount equal to 100% of your AGI. Furthermore, there used to be a “cutback” on itemized deductions for high income taxpayers, but in 2021 there is no cutback. No matter how high your income, you can deduct the full amount of your itemized deductions. Therefore, through large cash gifts to public charities in 2021, it’s possible to completely eliminate your income tax liability this year.
Marvin E. Blum
Marvin Blum at the easel, fostering his passion for arts, education, and children.
What Are You Having for Dessert?
November 9, 2021
Today, I am honored and humbled to receive the “Outstanding Advisor” award at the National Philanthropy Day celebration by the Fort Worth Metro Chapter of the Association of Fundraising Professionals.
November 15th is National Philanthropy Day. The day recognizes the great contributions of philanthropy—and those people active in the philanthropic community—to the enrichment of our world.
When asked for my views on philanthropy as an estate planning advisor, here are my thoughts:
The most gratifying part of my estate planning law practice is to help families with their charitable planning. Not only does the community benefit, but the family who is giving gets back even more than it gives. Philanthropy helps build and pass down a family legacy, providing glue to keep future generations connected. Not everyone can play a role in a family’s business or investments, but everyone in a family can be part of philanthropy.
In accepting the award, I described the estate planning process as a menu with a main course, appetizers, and dessert. The main course is planning that provides for you and your spouse. Appetizers are trusts that you create now to provide for your children and other loved ones. Then, after taking care of yourself and your family, you get to the fun part—dessert. For dessert, create a charitable vehicle such as a Private Foundation or Donor Advised Fund to benefit causes important to you and your family.
Such an estate plan provides for you, your family, and the community. Moreover, it leaves your heirs two important forms of inheritance: a traditional inheritance to provide for their needs, and a second inheritance allowing your heirs to provide for others. Through such as plan, you’ll make great headway in building a family legacy.
Marvin E. Blum
Marvin Blum celebrating his “Outstanding Advisor” award with mother Elsie and wife Laurie.
Do You Love Your Grandchildren Equally?
November 2, 2021
The last several Family Legacy Planning emails have been on the topic of giving assets to your family. While we’re on the subject of family gifts, here’s a provocative question: “Do you love your grandchildren equally?”
Suppose you have a son with two kids and a daughter with four kids. If you leave $12 million to the next generation (Generation 2 or “G-2”), that’s $6 million to your son and $6 million to your daughter. When G-2 dies, and the assets flow to the grandchildren (“G-3”), each son’s child gets $3 million, but each daughter’s child gets just $1.5 million. That’s a recipe for cousin jealousy.
To send a powerful message that you love all six grandchildren equally, here’s a simple proposal. Leave your estate plan intact, but take out a life insurance policy on your life and designate the benefit to go equally to your 6 grandchildren, per capita. For example, a $1.2 million life insurance policy would give each grandchild $200,000 at your death.
Although it doesn’t erase the possibility of jealousy, it does send the 6 cousins a clear indication that you loved all of them the same.
(Credit for this idea goes to my friend Bruce Udell of Sarasota, Florida.)
Marvin E. Blum
Marvin and Laurie Blum with their five grandchildren, whom they love equally.
Tips for “Use It or Lose It” Planning and Other Gifts
October 26, 2021
Last week’s Family Legacy Planning email created quite a stir by promoting a “Now & Later” approach to inheritance—give some now while you’re alive and the rest later at your death. Many are seeking tips on how to make lifetime gifts in the most tax efficient way. Consider these ideas:
- Make $15,000 annual gifts to as many people as you wish.
- In addition, pay tuition and medical payments (including health insurance premiums) for loved ones. Payments must be paid directly to the provider.
- For larger gifts, make a gift of your $11.7 million lifetime exemption. Under pending legislation, this exemption cuts in half on January 1, 2022—“use it or lose it.” Even if the new law doesn’t pass, the exemption automatically sunsets in half on January 1, 2026, just 4 years from now.
- If you gave away your full exemption in 2020, be sure to make a 2021 gift of the additional $120,000 inflation adjustment we received in 2021 ($240,000 for a married couple).
- In order to capture the full extra exemption before it cuts in half, you have to make a gift of the full $11.7 million. The $11.7 million consists of an old half and a new half. A gift of only half first eats up the old half of the exemption, so when the new half sunsets, you’ll be left with zero exemption.
- Married couples often make these $11.7 million gifts to SLATs (Spousal Lifetime Access Trusts) in order to retain access to the funds.
- If a couple only wants to give $11.7 million and not $23.4 million, make the gift entirely from one spouse to a DGT (Defective Grantor Trust) for the kids. If the $11.7 million gift comes 50/50 from the spouses, you’ll have no exemption left after sunset. Giving the gift entirely from one spouse saves $5.85 million of the other spouse’s exemption.
- To best protect your loved ones, we recommend you create trusts to receive the gifts, protecting the gifts from creditors, divorce, and taxes at death.
If the new law passes, the deadline for “use it or lose it” planning is December 31, 2021. But, if you supercharge the gift using a “squeeze & freeze” technique, or if you add the gift to an existing DGT or SLAT, the deadline is earlier—it’s the “date of enactment” of new legislation, which could be very soon. Time is of the essence.
Marvin E. Blum
Marvin Blum lecturing on “last chance” tax planning.
Inheritance: Give Some Now and Some Later, or Do It All at Death?
October 19, 2021
As discussed in the last two Family Legacy Planning emails, families struggle with balancing the amount to leave their kids versus the amount to leave to charity. As you settle on the amount to give your kids, the question becomes “When should I give it?” In giving assets to your kids, think about the benefits of providing some of the money to them now versus waiting until your death to leave it all to them. Consider the “Now & Later” candy approach to inheritance:
- They very likely will need it more now, in their earlier years of raising a family, than they will down the road.
- You will be here now to help guide and mentor them.
- You will have the satisfaction of seeing them benefit from your generosity.
- By spreading out the inheritance and starting now with smaller sums, your kids can learn from smaller mistakes and fare better later with larger sums.
- A gift now sends a message that you trust them, building confidence and pride that they are part of your family’s success story.
The timing of this topic ties in perfectly with current developments in tax law. If it passes, the Biden “Build Back Better” legislation greatly limits the tools available for making lifetime gifts:
- The lifetime exemption cuts in half on January 1, 2022 (just over 2 months from now), cutting back lifetime tax-free gifts from $11.7 million to $5.85 million.
- After the “Date of Enactment,” you can no longer use IDGTs (Intentionally Defective Grantor Trusts), traditional SLATs (Spousal Lifetime Access Trusts), or GRATs (Grantor Retained Annuity Trusts) to get assets out of your estate.
- After the “Date of Enactment,” you can’t make gifts to old IDGTs, SLATs, or any other Grantor Trusts (including most ILITs—Irrevocable Life Insurance Trusts) and get those assets out of your estate.
- The opportunity to do “squeeze” planning with valuation discounts goes away on the Date of Enactment.
Now is the ideal time to think about gift planning for your family, for both tax reasons and non-tax reasons. At The Blum Firm, we are honored to help you evaluate your gifting options.
Marvin E. Blum
Marvin Blum advocating for a “Now & Later” approach to inheritance.
Leaving Assets to Kids: How Much Is Too Much?
October 12, 2021
Last week’s Family Legacy Planning email created quite a stir when it raised the question of how much to leave to your kids versus charity. People struggle with finding the right balance between family and philanthropy. There is no easy answer. Given the interest, we decided this week to dive deeper into the debate. Let’s see what lessons we can learn from celebrities featured in Helen Rumbleow’s London Times article “Daniel Craig and the Curse of Inheriting.”
- Daniel Craig finds an inheritance “distasteful.” His plan for his James Bond earnings is to “get rid of it or give it away before you go” (perhaps easier said than done). He elaborates that he will not leave “great sums” to his two daughters, but he doesn’t say “no sums.” Once again, we are left to wonder what’s the right balance between kids and charity?
- Bill Gates’ plan to leave his kids “only $10 million each” was inspired by his friend Warren Buffett, and though he thinks inheritance is no favor to them, he still can’t “cut the purse strings entirely.”
- Elton John says it’s “terrible to give kids a silver spoon,” but still plans to leave his children in a “sound financial state.”
- Actor Ashton Kutcher refuses to hand out money freely, but adds: “If my kids want to start a business and they have a good business plan, I’ll invest in it.”
- Andrew Lloyd Webber stated, “I am not in favour of children suddenly finding a lot of money coming their way because then they have no incentive to work,” but in the same breath admitted he will give his children “a start in life.” How much is that?
Notice the tension in each of these examples. Parents don’t want to disinherit their kids, but they don’t want to disincentivize them either. They are trying to strike a balance. They want their kids to live a good life, but they want them to still have to work. According to Rumbelow, “the necessity of work is one of the guardrails against nihilism and self-loathing.”
The answer lies in taking steps to prepare them to inherit and then leaving the inheritance in a well-crafted trust. The Blum Firm specializes in designing trusts to help families find this balance. Trust provisions can guard against creating “trust babies” by rewarding productive behavior but withholding distributions from beneficiaries who are off track. Trustees should be charged with mentoring heirs in order to educate them and help them build self-esteem. Trust distributions should be spaced out so that beneficiaries who made mistakes with earlier distributions have a chance to get it right with later distributions. We would be honored to help your family create a trust plan that benefits and empowers your heirs, but also provides for charitable causes important to your family.
Marvin E. Blum
Marvin and Laurie Blum with their kids and grandkids. Loving your family includes taking responsibility to prepare them to inherit.
How Much Should I Leave to My Children?
October 5, 2021
Last week’s Family Legacy Planning email shined a light on philanthropy as glue that can hold a family together, second only to endowed family travel and retreats. When including philanthropy in your estate plan, a question arises on how much to leave to your children when you die, and how much to leave to charity. What is the right balance?
As baby boomers are on the verge of passing trillions of dollars of wealth to the next generation, a hot question is: “what impact will that wealth have on my kids?” William Vanderbilt famously said that the fortune left to him by his father “has left me with nothing to hope for.” He described inherited wealth as “a death to ambition.” In a recent London Times article “Daniel Craig and the Curse of Inheriting,” author Helen Rumbelow likens an inheritance to medicine: “give someone too much and there is an overdose effect; you kill the patient (or in this case the child) you had wanted to protect.”
In my estate planning practice, I often hear people say they plan to leave their assets to charity rather than their kids. They say that, yet that’s rarely how their estate plan reads. Typically, they still leave the vast majority (if not all) of their wealth to their kids. People struggle with finding the balance between how much to leave their kids vs charities. The question most of us ponder is “How much is too much to leave to our kids?”
An early champion of the concept of balancing an estate between family and philanthropy is Warren Buffett. Buffett famously said he wants to leave his kids “enough so they can do anything, but not so much that they can do nothing.” Note that he doesn’t advocate disinheriting his kids. His message is to leave some to family and some to charity. When I had the opportunity to ask him: “How much is the right amount to leave your kids,” he admitted that he struggles with that and frequently adjusts his plan to leave them more, as he sees that they’re capable of handling it.
From Buffett’s answer, I derive this wisdom: the right amount to leave your kids is the amount they’re prepared to receive. It’s our job as parents and advisors to prepare the next generation. Without preparation, I’ve heard an inheritance described as leaving a kid a loaded gun with no instruction manual. I realize these comments are graphic and harsh, but we in the senior generation have a responsibility to train future generations for what’s coming to them. Please join me in The Blum Firm’s mission to strengthen the family bond and take steps to prepare our heirs to inherit.
Marvin E. Blum
Warren Buffett attempting to protect his wallet from the reaches of Laurie and Marvin Blum.
The “Glue” That Keeps a Family Together
September 28, 2021
In recent Family Legacy Planning posts, we referred to Mitzi Perdue, a member of both the Sheraton Hotels and Perdue Farms families, author of How to Make Your Family Business Last. Perdue offers a list of reasons her family has stayed connected, but she emphatically states that the #1 reason they’re together is endowed family vacations, and the #2 reason is family philanthropy. We addressed her bold assertion about the benefits of family travel in an email a few weeks ago on August 4. Today’s focus is on philanthropy.
Perdue emphasizes the connectivity benefits of a family coming together to volunteer and/or donate. Not everyone can be part of working together in a family business, but everyone in a family can be part of philanthropy.
Family philanthropy not only helps others. The by-product is that the one doing the giving also benefits. In my own work on causes meaningful to me, I’ve often said that I get back more than I give. Indeed, philanthropy is a laboratory for family legacy planning, as it checks so many boxes for fostering a legacy and preparing heirs.
- It’s a training ground for group decision making. Research shows that the greatest reason for family failure is lack of communication and trust in group decision making. Coming together to select causes to support trains heirs to collaborate.
- Selecting a cause that’s meaningful to the family can help a family highlight an important part of its story. For example, supporting causes in an ancestor’s country of origin or funding research into a family medical issue can preserve a family’s heritage. The Perdue family charter focuses on helping communities where there is a Perdue poultry plant, giving back to those who helped build their business.
- Setting aside funds in a family foundation allows heirs to learn about investing and how to manage money.
It’s never too early to start. Even the Rockefeller kids who received a 25-cent allowance were schooled to set aside 5 cents for charity, 5 cents to save, and spend no more than 15 cents.
The Blum Firm has an active practice creating private foundations, designing charitable trusts (such as Charitable Remainder Trusts and Charitable Lead Trusts), and helping families navigate the tax and legal rules in charitable planning. We would be honored to help your family create the philanthropic structure that’s right for you.
Marvin E. Blum
Marvin Blum’s daughter and son-in-law, Elizabeth and Ira Savetsky, teaching philanthropy at an early age to their daughters. “My Face“ raises funds and awareness for surgery for children born with cranial facial differences. Ira is a plastic surgeon volunteering to operate on the young patients, while the family participates in events teaching kindness and acceptance for all.
Tradition, Tradition! Your Family Traditions Matter More Than You May Realize
September 14, 2021
We are now in the Jewish High Holy Days, which always puts me in a reflective mood. Last week we observed Rosh Hashonah, the Jewish New Year, and we turn this week to Yom Kippur, the holiest day of the Jewish year. For me, holiday memories always conjure up family traditions. I can hear Tevye in “Fiddler on the Roof” singing “Tradition, Tradition!” in my brain right now. Each family develops its own traditions, and those traditions are vitally important in passing down a family legacy from generation to generation.
In our Family Legacy Planning series, I’ve been quoting Mitzi Perdue, author of Making Your Family Business Endure Across the Generations. In recent emails, I highlighted Perdue’s assertion that the number one reason her family (Sheraton Hotels and Perdue Farms Chicken) endures is regular family travel, crediting her ancestors with setting aside funds in a trust to pay for annual family trips. She also stresses the emphasis on stewardship, training kids from early on to care for the family business and pass it down stronger to the next generation.
Perdue also stresses the importance of adopting a system of Family Governance, asserting unequivocally that “successful families are intentional about family governance.” The governing system addresses how to resolve quarrels (inevitable in every family). It also establishes a framework on how the family votes on major decisions. In our June 29 and July 6 emails, we addressed the particulars of family governance.
Perdue’s next reason for family continuity really speaks to my heart, especially this time of year: Preserving Family Traditions. According to Perdue, “the more traditions, the more glue.” Traditions are the “lifeblood of a family’s identity.” Mitzi’s family even created a “What it Means to Be Us” book. Each family member writes a page in that book, answering that question with words and pictures. The book preserves important traditions and stories for future heirs. It’s also a meaningful way to onboard in-laws, helping them understand the soul of the family they’re joining.
I had an “a-ha!” moment this week reading a blog post by dear friend Karen Cortell Reisman, founder of Speak for Yourself. Karen tells the story of her late mother making 114 gefilte fish balls each year for the family’s Rosh Hashonah gathering, and teaching Karen the technique before she passed away. When Karen’s son read his mom’s blog, he contacted her and said, “I’ll make gefilte fish with you anytime!” That’s what I’m talking about in creating and passing down a family legacy. Those fish balls mean a lot more to preserving the Cortell family heritage than you might think.
Every family has its own version of a gefilte fish tradition. Renowned family governance author Bruce Feiler tells of a grandfather tossing yarmulkes (skull caps) like Frisbees onto the boys’ heads at their weekly Shabbat dinners. The Blum traditions seem to also center around holiday observance, whether it be lighting Chanukah menorahs the kids made decade ago or the taste and smell of holiday recipes handed down from my grandparents to my own grandchildren now. Through those traditions, I feel a connection to my roots, and my goal is to preserve that connection for years to come, “L’dor Vador—From Generation to Generation.”
Marvin E. Blum
Marvin and Laurie Blum sounding the shofar (ram’s horn) to welcome the Jewish year 5782. Here’s to preserving every family’s meaningful traditions!
Texas Now Allows 300 Year Trusts
September 7, 2021
In last week’s Family Legacy Planning email, we shined a spotlight on the concept of stewardship and Hobby Lobby founder’s legacy plan: “No one owns the tree.” Each generation is responsible for nourishing the family enterprise so it will continue to bear fruit for generations to come. The optimum estate plan is to transfer the family assets into a trust that benefits heirs yet preserves the “tree” to pass down from generation to generation. The ideal trust also provides for mentoring heirs, so they grow into responsible, educated, empowered beneficiaries who understand and embrace the family culture.
With family legacy planning now a growing trend, there is an increased appetite for trusts of longer duration. Such trusts not only protect the family “tree,” but they also provide the beneficiaries with important protections against creditors and divorce, as well as tax savings. Recognizing this trend, the Texas legislature just enacted a new law to allow trusts to last for 300 years. The new law applies to trusts with an effective date on or after September 1, 2021. If you create an irrevocable trust during your life, the effective date is the date the trust is created. If your Will or Living Trust provides for trusts that will be activated upon your death, the effective date will be your date of death.
Before this new law, the Texas “Rule Against Perpetuities” permitted trusts to last no longer than the lifetime of anyone alive at time of trust creation (known as a “measuring life” who was identified in the trust), plus 21 years. If such a measuring life was a baby who lived to 80, the maximum length of a Texas trust was about 100 years.
In the past, Texans wishing to create a longer-term trust created the trust under the law of another state (such as a perpetual trust in Delaware, South Dakota, or Alaska, or a 365-year trust in Nevada). To do so required naming a trustee in that chosen state. Texans desiring longer-term trusts now have the choice of keeping their trusts at home. There are still other protections that may favor creating an out-of-state trust, but if the only concern is duration, a Texas trust is now an option.
Estate planners are now exploring whether irrevocable trusts created before September 1, 2021 can be modified to last longer. That analysis needs to happen on a trust-by-trust basis, depending on the facts of each case. However, what is clear is that if your Will or Living Trust creates a Texas trust that activates upon your death, you should consider amending your plan to take advantage of the new 300 year term.
Marvin E. Blum
Creating a Strong Family Culture: “No One Owns the Tree”
August 31, 2021
In The Blum Firm’s Family Legacy Planning series, last week’s focus was on endowed family travel, a surprising key tip from Mitzi Perdue on how to sustain a family business. This week, we address another tip on how to build a strong family culture.
As mentioned last week, Perdue is a first-hand expert and author on this topic, daughter of Sheraton Hotels founder and wife of Perdue Farms chicken entrepreneur. Per a Dennis Jaffe study, the odds are 1 in 1,000 that a family business will last 100 years. Perdue credits her family’s success in beating these odds with the fact that her family enjoys a rock-solid family culture. That culture is instilled in kids from a young age.
In a presentation I attended, Perdue shared a number of best practices on how to create such a culture. The first tip is to teach kids the lesson of stewardship. Each generation borrows a family business from the prior generation. The founding generation (Generation 1 or “G-1”) passes the business down to G-2. G-2’s job is to steward it and pass it down to G-3, and so on. Heirs are taught early on not to spend it all. Perdue’s family lives a very comfortable life, but they frown upon extravagance and ostentation.
Warren Buffett emphasizes this same concept. When asked for tips on how to raise kids in affluence, Buffett urges G-1 to be role models for living responsibly. He stresses that our kids are watching us more than listening to us, so it’s our job as parents to live in such a way that we set an example.
To put an exclamation point on the importance of stewardship, I recall a story told to me by David Green, founder of Hobby Lobby. Green likened the Hobby Lobby business to a tree. He trained his kids that “no one owns the tree.” Each generation has the responsibility to work hard and nourish the tree, so that the tree can bear fruit. You can enjoy the fruit, but don’t harm the tree. Steward the tree so it will continue to grow and bear more fruit for future generations.
Green’s advice ties in perfectly with the use of trusts in estate planning. By transferring ownership of the “tree” into carefully crafted trusts, future generations can enjoy the fruit while preserving the tree as a long-term family legacy.
Marvin E. Blum
Marvin Blum highlights the Hobby Lobby legacy: “No one owns the tree.”
What Keeps This Family Connected? The Answer May Surprise You.
August 24, 2021
I attended a presentation on Business Succession Planning entitled “Making Your Family Business Endure Across the Generations.” The speaker was Mitzi Perdue, author of a recent book on this topic. Mitzi lives this topic first-hand, as her father’s Henderson family started Sheraton Hotels, and her husband’s family owns Perdue Farms, the largest producer of organic chicken in the world.
I expected the presentation to be all about corporate governance and how to set up the best structure for a business enterprise. That’s not what Mitzi talked about at all. Instead, she said the solution to having a family enterprise last lies with the family culture.
Mitzi gave a number of tips on how to create a strong family culture. I will share more of her ideas in future emails, but today’s focus is on one tip she emphasized most emphatically, a tip that may surprise you as much as it surprised me: family travel, and not just family travel, but endowed family travel. Here’s what Mitzi had to say about “endowed vacations,” the surprising solution for how to sustain a family business enterprise.
- The family travel started 130 years ago when her ancestor, John Henderson, set up a trust to pay for an annual family reunion. In her words, “the annual reunion is our safety net, the most important part of our lives.”
- Mitzi encouraged the Perdue family to also plan vacation reunions. The Hendersons travel annually on a more upscale trip; the Perdues travel each 18 months on a more modest trip. It doesn’t have to be lavish; the key is to all be together.
- Per Mitzi, if you don’t set up a trust to pay for the costs, then after Generation One dies, it lasts only a couple of years, then people go their separate ways. For a couple of years, it’s Thanksgivings, by year 5 it’s just weddings, then just funerals, and by year 10, they don’t even go to funerals.
According to Mitzi, you not only need a trust to endow the costs, but you also need a trust to provide the structure. It takes a trust so there’s a trustee whose job it is to make sure someone plans the reunions and they actually happen. This structure dovetails perfectly with the FAST (“Family Advancement Sustainability Trust”) pioneered by The Blum Firm and Tom Rogerson. The FAST is a trust that (1) provides the funds and (2) provides the leadership to make sure families continue to meet regularly. To learn more about the FAST, here’s a link to our May 2021 post on it.
As I’ve said before, “don’t let a funeral director plan your next family reunion.” Family travel is not just fun, it’s critical to sustaining a family culture, and it’s critical to the survival of a family business as well as the survival of the family.
Marvin E. Blum
The Blum family’s annual trip to YMCA of the Rockies, now in 30th year. The travel doesn’t have to be lavish; the key is to be together.
Even Young Adults Need Estate Planning
August 17, 2021
Even young adults need estate planning, to which you might reply, “Duh! Of course they do. We already know that.” However, most young adults have not signed estate planning documents, thinking they’re “too young” to worry about it.
In our focus on Family Legacy Planning, we are shining a light on the concept of “holistic” estate planning, planning that goes beyond just having a will. One aspect of holistic estate planning is to see to it that every adult member of your family is protected.
I recently read an article that drives home this point: “Estate Planning for a Disrupted Life” in the July/August 2021 issue of Probate & Property magazine. It tells the story of one such young adult referred to as “S.T.,” seemingly invincible, already an accomplished professional with multiple degrees, fluent in four languages. While leaving work and walking to her car, something fell from a building and hit her in the head. The result was a “TBI”—a traumatic brain injury. Without a Power of Attorney (naming an agent to handle her financial decisions) and without a Health Care Power of Attorney (designating who speaks for her on medical decisions), S.T.’s fate was left to the courts. A court-appointed Guardian Ad Litem (a “GAL”) accepted a lawsuit settlement on her behalf, over S.T.’s objection. The trial court and appellate court sided with the GAL, but the state Supreme Court reversed, siding with S.T. It was a very messy and expensive fight.
Let’s rewind the clock and imagine that S.T. had signed simple documents like a Power of Attorney, Health Care Power of Attorney, Designation of Guardian, HIPAA Waiver, and Directive to Physicians. These five documents are part of almost every estate planning basic package, along with a Will. Instead of turning over her decisions to the court system, S.T. would have decided in advance who would be in control of her financial and health decisions, minimizing (and possibly eliminating) the court’s role.
I know, what happened to S.T. was a fluke and not likely to happen to any young adults in your family. But doing some simple documents is very wise insurance, just in case. COVID-19 taught us that even young people are vulnerable. Holistic estate planning means planning for things beyond who inherits when you die— things like family governance, asset protection planning, and planning for contingencies such as disability and other illness. Holistic planning also means seeing to it that every adult member of your family has signed a package of basic estate planning documents.
The Blum Firm would be honored to help you achieve this peace of mind.
Marvin E. Blum
Estate Planning Lessons from COVID-19
August 10, 2021
As COVID-19 continues to dominate much of our psyche, let’s reflect on some powerful ways the pandemic has impacted estate planning. In particular, let’s ponder the impact COVID-19 is having on Family Legacy Planning.
First and foremost, COVID-19 has heightened an awareness of our mortality. Playing “the waiting game” to do estate planning has always been risky. But we are now more aware than ever how fragile health is, and how precious life is. Even the young are not insulated from this health risk. Putting off planning is even riskier now.
Second, spending more time at home has provided many of us a chance to reflect on what gives our lives meaning. Creating and passing down a family legacy has a new emphasis. I interact with many “baby boomers” like me who ponder “to what end have I created this wealth, and what impact will it have on my heirs?” Now is an ideal time to write a Legacy Letter to your family.
Third, as the circle of people we spend the most time with narrowed to those in our family, we became more attuned to our family dynamics. All families have certain sensitive issues, and the tendency is to sweep them under the rug. Ignoring these issues doesn’t make them go away. On the contrary, they tend to fester, and later (perhaps after Generation One/“G-1” is deceased) they erupt like a volcano. The time to address these issues is now, especially while G-1 is here to help serve as family “glue.”
What’s the lesson learned? Let’s engage in Family Legacy Planning, starting with holding family meetings (conducted by a professional facilitator) to (1) improve communication and trust among family members, (2) provide heirs with training so they’re prepared to inherit, and (3) preserve the family’s mission, heritage, and unique culture.
What’s another lesson of COVID-19? We have learned how to “Zoom!” Although meeting in person is preferred, it’s hard to find a time and place for a family meeting that works for everyone. It’s better to meet “Brady Bunch” style by Zoom than to keep postponing the meetings until all are available.
A recent New York Times article summed up the lessons of COVID-19 with the term “YOLO” – You Only Live Once, so stop postponing meaningful experiences. That’s true, but my dear friend Karen Reisman (www.speakforyourself.com) responds with the powerful antidote: “YODO” – You Only Die Once; you LIVE every single day, but give your loved ones the gift of being prepared for the ONE day when you’re gone. The Blum Firm is honored to help you prepare for that “YODO” day and pass down a meaningful legacy to your family.
Marvin E. Blum
Marvin Blum at his first grandson’s Bris, learning lessons from COVID-19. (Photo credit: Karen Reisman)
Preserving Family Heritage = Stronger Heirs
August 3, 2021
In last week’s Family Legacy Planning email, I shared how a recent speech I gave lead to improvements to The Blum Firm’s Red File Checklist. The Red File contains important information to pass down to your family, information that’s not in your estate planning documents (think: passwords, key contacts, caregiving wishes; but also think: lessons learned, goals for your family, (and as discussed last week) even plans for your funeral). Another idea hit me during that speech: use the Red File to write down information about your ancestors and family stories, especially stories of resilience when ancestors overcame obstacles.
Why is it important to preserve family heritage? Research shows that heirs who know more about their ancestors (names, hometowns, what they were like and what they did) actually have higher self-esteem. It is also well-established that knowing stories of resilience helps heirs remain strong and confident when adversity strikes (and that’s WHEN, not IF). Heirs who know they descend from a line of survivors are more equipped to deal with life’s struggles.
A great activity for a family meeting is for everyone to share memories of family stories. It’s a chance for everyone to participate.
As an example, please allow me to share a Blum heritage story. All four of my grandparents barely escaped the Holocaust, making it to America alive but penniless, knowing not a word of English. My grandfather used to say he left behind all his possessions except the knowledge in his head, leading to his motto: “What you put into your head, no one can ever take away from you.” From that heritage, I was raised with two overriding values: (1) education and (2) hard work. Those values made me who I am today. So when Laurie and I had a still-born baby on February 11, 1982, we knew we had the strength to survive—and when Adam was born exactly one year later on February 11, 1983, our faith was rewarded. When a tornado destroyed my law office in 2000, I also knew I came from survivors and could rebuild my law practice. When my brother Irwin died at age 65 of pancreatic cancer, I was heartbroken but knew we would carry on his legacy.
We all have stories of ancestors overcoming hardship, and we can all draw strength from those stories. Our heirs can also draw strength from those stories. Financial assets are only part of an inheritance. Let’s write down those stories and pass down that inheritance too.
Marvin E. Blum
Four Generations of Marvin Blum’s Family Heritage: (from left) Marvin’s mother Elsie Blum, his great grandfather Rabbi Eliezer Weinstock (“Zaidy”), his brother Irwin Blum, and his grandmother Pauline Oberstein. Zaidy’s left eye was poked out in a Russian uprising against Jews.
A Parting Gift to Your Family: Write Your Own Obituary, Gather Photos, & Plan Your Memorial Service
July 27, 2021
I recently had the privilege of speaking at a Lion Street Trusted Advisors Conference in Las Vegas. My topic was the “Red File,” a roadmap of information for your family and agents to follow in four areas: your incapacity, your death, business succession planning, and passing down a family legacy. The Red File provides critical information your team needs to know in order to carry out your wishes, but this is information not contained in your estate documents. Therefore, The Blum Firm created a Red File Checklist to help you assemble this information. You can access our Red File Checklist here.
The Red File Checklist is forever a work-in-progress. We continue to add to it as new ideas come to us. While speaking in Las Vegas, the idea hit me of an important addition to the Red File: give your family the gift of planning for your own memorial service and obituary.
This idea grew out of an experience I had at a group meeting I attended for TIGER 21, a network of investors who come together to learn and serve as a “personal board of directors” for each other. One of my colleagues commented what a difficult week he just had, having lost his father-in-law days ago. He lamented the struggle of having only a couple of days to handle all the funeral arrangements, write an obituary, and gather photos for a slide show of lifetime highlights, all while coping with the heartbreak of loss.
At that point, the chair of my group gave me an assignment: over the next month, I was to write my own obituary and collect memorable photos to put on a digital file. The task was arduous, even in the best of circumstances. Imagine how much harder it would be for family members to do this on my behalf, during the first days of the grieving process. I realized that drafting an obituary (to be later updated/modified) and gathering photos was a true act of love to those we leave behind.
Click here to read my “pre-obituary.” I also created a digital file of photos that tell my pictorial life story. We’ve added the tasks of writing a “pre-obituary” and making a digital file of photos to The Blum Firm’s Red File Checklist, and I included them in my own Red File. I urge you to pause and give your family a gift of doing the same for them.
Marvin E. Blum
Marvin Blum speaking on the “Red File” in Las Vegas.
Marvin Blum’s Journey into the “Soft” Side of Estate Planning
July 20, 2021
This week in our Family Legacy Planning Series, I want to discuss my journey into the “soft” side of estate planning. Like most estate planning advisors, I began my career focusing on the technical and tax aspects of estate planning, what I often refer to as the “head” side of estate planning. After several decades of witnessing challenging family dynamics, often fueled by inheritances passing into unprepared hands, I began to ask what could we, as planners, do to help our client families avoid these pitfalls? My focus then shifted from all “head” estate planning to “head and heart” estate planning.
Many of our clients are hurting, and almost all worry about what impact an inheritance will have on their heirs. Estate planning advisors have skills to help, more than we realize. We also have a special seat at the table. If we don’t bring up these issues, who will?
I discussed tapping into those skills earlier this month with John A. Warnick as part of the Purposeful Planning Institute’s “Thought Leader & Industry Innovator Series.” Click on the link below to hear my guidance on how to help our client families achieve multi-generational success and pass down a meaningful legacy.
Topical outline available here.
Marvin E. Blum
Every Family Needs Some Kind of “Family Office”
July 13, 2021
In last week’s email in our Family Legacy Planning series, we focused on how to set up a family governance system. The core document that outlines the family governance structure is called a Family Constitution. We recommend that every family create a plan for how it will operate, and then document it, just as every family business needs a documented governance structure (a Charter and Bylaws). In listing the key provisions of a typical Family Constitution, included is the need to address the structure and function of a “family office.”
A “family office” is still a fairly new concept. Over the last decade or so, successful families have prioritized creating a centralized “office” to handle all the family’s needs. For families of higher net worth, a “Single Family Office” is often the solution, where the office is dedicated to the affairs of just one family. Where the budget doesn’t allow for a single family office, there are other solutions. The most common is a “Multi-Family Office” where a team of people serve the needs of several families who share the cost. Another solution, of especially rising popularity during COVID-19 “Zoom” era, is the “Virtual Family Office.” A family advisor serves as “quarterback” and assembles a team of all the necessary players, each of whom work from their own location and meet virtually as needed, avoiding the overhead of a physical office.
Functions served by the family office include overseeing all the family’s financial needs, but the kind of family office that helps create and preserve a family legacy will do much more than financial tasks. In addition to monitoring business, investing, tax, accounting, estate planning, insurance, bill paying, property management, philanthropy, and other financial matters (what Tom Rogerson of GenLeg Co. refers to as the “right rail” of a railroad track), the modern family office also addresses strengthening family relationships, culture goals, family dynamics, psychological needs, and fostering the family’s purpose (the “left rail”). The family office plans family enrichment and education activities to serve as “cross-ties” to build communication and trust, bridging the right and left rails. The family office manager will involve all the family members in these activities, drawing from each one’s skill set so everyone feels a part of the team. There’s a role for everyone, even for those without financial acumen.
A family office is also an important part of “family glue” after selling a family business. Often, the family’s identity is lost when their business is sold, but a family office can keep the family unified around jointly managing the “family enterprise.” Moreover, it can be of major psychological benefit when the business founder is searching for a new role after the “business-baby” is sold. As I’ve heard from a number of founders’ wives: “I married him for breakfast and dinner, but not for lunch.” The founder can find continued purpose by playing a key role in the family office.
Each family needs to design the family office structure that’s right for it. There’s no cookie cutter for this, and no two will match. As Tom Rogerson says: “If you have seen one family office, you have seen ONE family office.” Regardless what yours looks like, your family will benefit from it, and preserving your legacy may depend upon it.
Marvin E. Blum
The Family Constitution: “We, the People…”
July 6, 2021
With the Fourth of July celebration just behind us, it’s a good time to reflect on governance, in this case—Family Governance. In our last email, we covered WHY it’s important to adopt a Family Governance System, and then shifted to HOW to do it. Critical to the process is for the family members to participate in the decision-making. The goal is for the family to have buy-in and feel they own the governance system they adopt.
However, the family shouldn’t go it alone. The family needs experienced advisors to guide the process, ask the right questions, facilitate the conversation, and mediate when necessary. The advisors can synthesize all the input and craft governing documents, starting with a Family Constitution, sometimes called a Family Charter. Just like our country’s constitution, the family’s is a framework of fundamental principles and ideals that determine how the family will make decisions, operate, and be governed.
Here are key provisions of a typical Family Constitution:
- Start with the Family Mission Statement, which guides all major decisions. The family may expand this section to cover the family’s core values and its vision for the future. By setting out these principles and training heirs to understand them from an early age, you improve the odds they won’t get lost with time.
- Create a governance structure, including some or all of the following:
- Family Council of selected family members to make management decisions, similar to a company’s board of directors
- Voting Family Members, similar to shareholders of a company, who elect the Family Council and must approve certain major decisions
- At-large Family Members, defining those who attend family meetings along with the Voting Family Members
- Family Advisory Board, consisting of the family’s “go-to” outside advisors (attorney, CPA, trust officer, financial advisors, other counselors)
- Identify who qualifies for each of these roles: determine the role of in-laws, step-kids, minors (at what age do they join?), former spouses after a family member dies or divorces, unmarried partners of a family member, etc.
- Set out voting procedures (quorum, decisions requiring a majority vs. super majority vs. unanimous vote)
- Procedure for resolving conflicts (a system for mediation and/or arbitration)
- Policies for educating heirs about family wealth and responsibilities (when and how)
- Process for onboarding in-laws
- Addressing behavior that leads to disqualification
- Guidelines for family meetings/retreats (how frequent, location, who plans them, etc.)
- Broad investment guidelines
- The structure and function of a Family Office
- Process for amending the Constitution
These items are merely a suggestion and not an exhaustive list. There’s no “one size fits all.” Some families will need all of these bells and whistles; some will need only part of them. The critical point is that each family should examine its needs and create a system that’s right for it. A final point: as the final bullet point above reveals, the Constitution is not set in stone. It is a living document that will evolve over time to meet the needs of an evolving family.
Marvin E. Blum
Marvin, Laurie, Adam, and Lizzy Blum 31 years ago atop the U.S. Capitol, looking out on Washington, D.C. and celebrating our system of government.
Family Governance: The Ties That Bind
June 29, 2021
In our last Family Legacy Planning email, we introduced the topic of a Family Governance System. In learning from the best practices of successful multigenerational families, we found they adopt and follow a governance structure to help them navigate the uncharted waters of family life. In order to look like the family they want to be 25 years from now, families need a procedure for making group decisions, resolving conflicts, onboarding in-laws and younger generation members, and charting out a path to achieve the family’s long-term vision. They don’t leave things to chance. That’s the WHY of creating a Family Governance System. Now let’s address the HOW.
We are all familiar with the governance structure of a business. Let’s look to that example for guidance. There are shareholders, who elect directors to set policy and strategy, who elect officers to run the day-to-day. There are board committees for special purposes. There is a set of governing documents including a charter and bylaws. Board meetings happen on an established frequency with prescribed rules for voting. All of these add up to helping strengthen a company’s core and weather through the ups and downs. The governance system makes for a strong business. Likewise, for a family to endure, it needs a governance structure comparable to that of a family business.
Ironically, it’s obvious to business owners that a company needs such a structure. However, it isn’t as obvious to most business owners that their families need one too. Many business owners feel that a strong business will keep the family tied together and unified. In actuality, it’s the other way around. As noted family consultant and my good friend Tom Rogerson of GenLeg Co. says, “A strong business cannot hold a family together, but a strong family can hold a business together!”
Rogerson uses the analogy of a railroad track to illustrate the multiple goals of family governance. The right rail represents the financial goals of a multigenerational family. The left rail represents the family’s relationship and culture goals. The crossties unite the two rails together where the family learns communication skills and builds trust in family decision making. Strong crossties are the ties that bind a family together through thick and thin. By having a structure and engaging in learning exercises, the family becomes more connected. It develops a healthy interdependence, so the support system is in place to be there for each other.
In future emails, we will continue exploring HOW to create this structure, but we’ll close with one cardinal rule. A successful governance structure is not established by some higher power and imposed on a family. Instead, to achieve “buy-in,” each family member needs to participate in the process and own it. To build an empowered family, each participant needs to feel some responsibility and authority over its governance system. As Tom Rogerson so eloquently sums it up, “Wealth without responsibility or authority is a formula for resentment and failed self-worth.” Involving the family in the activity of building and maintaining healthy family governance is one of the keys to raising responsible heirs.
Marvin E. Blum
Marvin Blum (right) speaking with Tom Rogerson at a Family Governance Conference in Las Vegas.
A Conversation with Marvin Blum—“Last Chance” Tax Planning
June 22, 2021
In our Family Legacy Planning series, we are shifting gears this week to cover a matter of urgent importance. With new tax proposals pending in Congress, the tax landscape may soon drastically change. Now is the time to engage in “last chance” tax planning and get in front of the new legislation. You don’t want to wake up with regret on January 1, 2022, wishing you had acted before it was too late.
I recently joined Scott Bishop, CPA, CFP to discuss potential income and estate tax changes under the Biden administration for the Financial Planning Association’s Tax and Estate Planning Knowledge Circle. Click on the link below to hear my analysis, predictions, and planning tips.
Here are the topics discussed:
- What are the key developments since the November 3, 2020 election?
- What are the key proposals to raise taxes?
- What are the key provisions of each of these legislative proposals?
- What is likely to pass?
- Given all this uncertainty, what kind of planning are you seeing?
- What other tax law developments are being considered?
Topical outline available here.
Family Legacy Planning is a matter of both the heart and the head. Today’s emphasis on more on the “head” side of the ledger, dealing with the tax and financial aspects of holistic planning. Next week, we return our focus to the other side of the ledger, Family Governance Planning, in order to properly prepare your family for the financial inheritance heading their way.
Marvin E. Blum
Why Your Family Needs a Family Governance System
June 15, 2021
Throughout 2021, The Blum Firm has been sending weekly emails about our latest initiative, Family Legacy Planning. We’ve discussed the compelling statistic that 90% of families fall victim to “shirtsleeves to shirtsleeves in 3 generations.” We have stressed that the single most important action is to hold regular family meetings. Our emails provided suggested topics for family meetings, with particular emphasis on creating a Family Mission Statement. We also shined a spotlight on how to write a “Legacy Letter,” also known as an “Ethical Will.” Most recently, the focus has been on creating an in-house family education program to train heirs to be responsible inheritors. Today, we highlight another important aspect of Family Legacy Planning: creating a Family Governance System.
When we study the best practices of the “ten percenters,” those families who beat the shirtsleeves curse, we learn that they are intentional about creating a successful family. They don’t leave things to chance. As we’ve said before, they understand that “hope is not a strategy.” Over time, as a family grows and evolves, family dynamics becomes more complicated. This is especially true as in-laws join the family, and as siblings and cousins interact. Inevitably, conflicts will arise. Relationships will be strained. This happens in every family, even in the most harmonious ones. Successful families think ahead. They get in front of these stresses by adopting a formal Family Governance System that will guide them through the twists and turns that every family experiences.
In upcoming emails, we will dive deeper into the “how to’s” of family governance. As a hint of what’s coming, be ready to learn more about concepts such as:
- A family constitution and bylaws
- A family council
- Family committees
- An advisory board of the family’s “go to” outside advisors
- Determining which family members vote
- The procedure for making decisions
- The procedure for resolving conflicts
- The process for onboarding in-laws
Keeping a growing family operating smoothly and lovingly can be even more challenging than running a business. It’s well-accepted that a business needs a governance system. It’s even more critical to provide your family that kind of structure. As with everything else when it comes to families, there’s no “one size fits all” governance system. Each family decides what fits them best, but every family deserves some kind of governance system to help them swim through the uncharted waters of family life.
Marvin E. Blum
Happy summer from Marvin Blum and the growing Blum family! I see eleven good reasons here for a family governance system to help us swim through life.
Create a “Red File” to Prepare Your Heirs for What’s Coming
June 8, 2021
In last week’s Family Legacy Planning email, the focus was on creating an in-house family education program to train your heirs. All too often, an inheritance lands in unprepared hands. Giving your heirs the gift of advance preparation improves the odds that they’ll know how to handle the inheritance when it comes their way. We wrote before of a football field where the quarterback hurls a pass to the other end of the field, where receivers are standing around without a clue what’s coming or what to do with the football when it arrives. The quarterback is Generation One, the football is the inheritance, and the receivers are clueless future generations. Unless you prepare your heirs, the odds are high they’ll fumble the football.
Part of preparing heirs is to also leave them a “Red File.” A Red File is a roadmap containing critical information to guide the family through a loved one’s incapacity, estate administration, business succession, and creation and continuation of a lasting legacy. The Red File covers the items missing from even the most carefully crafted legal documents. Your will and other estate documents don’t contain items like key contacts, passwords, caregiving wishes, and heartfelt reflections. The process of preparing heirs includes providing them this information so they won’t have to go fishing for it after you’re gone.
Many put off this task, assuming they have time to take care of it later. However, we all know that people in seemingly excellent health can die quickly and unexpectedly. For example, the leading cause of death in the United States is heart disease. For two-thirds of women and one-half of men who die from heart disease, their FIRST SYMPTOM WAS DEATH—not chest pain, not discomfort in an arm, and not shortness of breath. Make it a goal to create a Red File this summer.
Click on this link for The Blum Firm’s Red File checklist, containing the following four sections:
- Centralized File of Personal Information: Passwords, contacts, listing of assets you own, location of assets and documents.
- Plan for Incapacity: Who will provide care, will they be compensated, where will you live, favorite TV shows, movies, colors, foods (don’t make your caregiver guess).
- Business Continuity Plan: Your will says who will own the business, but not who will manage it. Give your family management succession guidance to facilitate the transition for the day WHEN (not IF) you are gone.
- Legacy Plan: A Red File is the ideal place to document the “heart” side of your estate plan. Provide information on ancestors, obstacles they overcame, meaningful memories, lessons learned, values, and goals for the family.
After preparing a Red File, be sure to update it periodically. Also, tell your loved ones where they can find it. It can be handwritten or electronic, but be sure they know the password so they can open it.
Marvin E. Blum
An entry from Marvin Blum’s “Red File”—Favorite Dessert: Apple Pie.
Create a Family Education Program to “Train Up” Your Heirs
June 1, 2021
In The Blum Firm’s research on Family Legacy Planning, we discovered (not surprisingly) that one of the greatest causes of family failure is unprepared heirs. To combat that problem, you have to be intentional. You can’t expect heirs to just automatically learn all they need to know to become responsible inheritors. We recommend that every family create an in-house education program tailored to your family’s specific situation.
Here are the steps to create a family education program:
1. First, assess where you are. Then decide what information you’d like your heirs to know. Every family has its own needs and its own vocabulary. This is not a “one size fits all” process. The difference between where you are and where you want to be defines a “gap” that you want to fill.
2. Meet everyone where they are, at their age and sophistication level. Design separate programs for different groups. Deliver the content in an age-appropriate way, spoon feeding it out as they’re ready to receive the doses of information. Don’t overload their brains with a “fire hose” blast of detail.
3. Use a variety of formats, such as reading materials, games, teleconferences, and outside speakers. Make it interactive and not a lecture. Find a balance between finance and fun.
4. The curriculum goes beyond finance. Be sure to include family history, values, lessons learned, philanthropy, wealth stewardship, as well as financial literacy, money management, estate planning basics, and legal duties.
5. Identify who will be responsible for implementing and monitoring the education program. Choices include a learning committee formed within the family, an outside advisor, or a family office employee.
6. Modify the program over time to continue meeting the family where they are. As family members grow and learn, the education content and methods will need to evolve.
The next big question is always: At what age do we start? Answer: It’s never too early. There are lessons that even very young kids can learn, if delivered the right way. In the Jewish tradition, as expressed in Ethics of the Fathers, we learn: “Train up a child in the way he should go, and even when he is old, he will not depart from it.” In the Blum family, we’re already starting with our grandchildren. Remarkably, I’m teaching them, but they’re also teaching me!
Marvin E. Blum
Marvin Blum and his grandchildren: “Counting my blessings: 1, 2, 3, 4, 5.”
Here’s a F.A.S.T. Solution to Legacy Planning
May 25, 2021
In last week’s Family Legacy Planning email, we stressed the “last chance” opportunity to take advantage of the $11.7 million estate and gift tax exemption before it reduces by half or more—“use it or lose it.” Now is an ideal time to use that exemption to invest in your family. By funding a FAST (Family Advancement Sustainability Trust) now, you can help your family avoid falling victim to “shirtsleeves to shirtsleeves in 3 generations.” Statistics show that 90% of families fail. A FAST can improve the odds that your family will be one of the 10% who succeeds.
We have all witnessed the disaster when an inheritance passes into unprepared hands. Families who succeed engage in best practices like family meetings and family education, all aimed at preparing heirs to be responsible inheritors. In my experience, the biggest issue that keeps matriarchs and patriarchs awake at night is worrying about how their kids will handle all that life throws their way. A FAST equips your family to remain healthy and connected through the generations.
In a nutshell, the FAST does two things:
(1) It is funded with assets that will be used to pay for family enrichment and family education activities such as family retreats, family travel, and preserving the family’s heritage, as well as maintaining legacy real estate assets the family wants to pass down to future generations; and
(2) The FAST appoints trustees/committees who are paid to do the legwork in planning these activities and making sure they happen.
The end result is a gift to your family of a meaningful and lasting legacy.
Our experience is that when Generation 1 (“G-1”) hears of the best practices of successful families, it embraces these activities, pays for them, and will make sure they happen. G-1 has hopes and dreams that future generations will continue to engage in these best practices, but the reality is that after G-1 is gone, G-2 often drops the ball. G-2 may balk at paying for them, and G-2 often is too busy or preoccupied to do the legwork in planning them. The FAST is a practical tool to help the family continue the process of preparing heirs. It can be an add-on to an existing estate plan without disrupting the existing plan. With the current all-time high exemption, now is the ideal time to fund assets into the FAST.
Here’s another tip: You can substantially leverage your gift by using the funds in the FAST to purchase a life insurance policy on G-1. When G-1 is gone, the proceeds are paid into the FAST free of estate tax and generation skipping tax. With proper planning, you can endow your family’s success for many years to come and fund a legacy that will live on long after you are gone.
Marvin E. Blum
“Last Chance” Tax Planning & Family Legacy Planning—It’s Not “Either/Or.” It’s BOTH.
May 18, 2021
When The Blum Firm embarked on this Family Legacy Planning series several months ago, we described this new dimension of our practice as bringing both “head” and “heart” to the estate planning process. The key to holistic estate planning is to consider both “quantitative” and “qualitative” concepts and merge them into an estate plan. In the spirit of recognizing the marriage of these “soft” and “hard” issues, we want to focus on how to address family legacy planning during today’s hot legislative climate. We can’t ignore the fact that this family legacy conversation is happening during a time of potential tax law upheaval.
As we study the proposed tax changes in the American Families Plan and Senate bills known as the “For the 99.5% Act” and the “STEP Act,” we become aware of the urgent need to get out in front of these proposed changes. We read daily articles urging the wise to engage in “last chance” tax planning or else wake up with regret in January 2022. We need to pay attention to these warnings and take action, but do so thoughtfully, in a way that blends head and heart. Now is the chance to create a multi-generational estate plan to help set up future generations for success.
The estate and gift tax exemption is at an all-time high of $11.7 million, but legislation threatens to drop to the estate tax exemption to $3.5 million and the gift tax exemption to $1.0 million. It’s a “use it or lose it” situation. By using “squeeze & freeze” techniques that are currently available but now on the chopping block, you can remove far more than $11.7 million from your estate. For example, a married couple can transfer $36 million of assets to a Family Limited Partnership, where the discounted fair market value of the FLP units may be $23.4 million (after a 35% valuation discount). After gifting those FLP units to trusts, the couple can sell additional FLP units with a value of $150 million to grantor trusts and carry a note, shifting all the future appreciation on the assets out of the estate. Here’s the urgency: you can lock in the current exemption and grandfather the “squeeze & freeze” techniques used, as long as you complete your planning before the law passes.
Now may be the last chance to achieve this kind of wealth shift without having to pay income tax, estate tax, or gift tax. When you use creative tools like SLATs, DGTs, 678 Trusts (or BDITs), and GRATs, you not only get assets out of your estate, but you can carefully design the plan so you continue to have access to assets, control over investment decisions, and flexibility. That’s the “head” part. Now here comes the “heart” part. You can create a structure that includes future generations and begins training them to become responsible inheritors. You can build into the plan family governance procedures to teach heirs about philanthropy, entrepreneurship, family heritage, and values. After Generation 1 passes away, the assets continue in trusts designed with mentoring opportunities to continue educating and empowering future generations.
The ultimate merging of head and heart comes in the creation of a FAST (Family Advancement Sustainability Trust), a trust that endows the process of family meetings and covers the cost of preparing heirs. Now is the ideal time to use the $11.7 million exemption to fund a FAST. In next week’s email, we’ll dive deeper into the FAST solution to Family Legacy Planning.
Marvin E. Blum
A “Love Letter” to Your Family – Part 3
May 11, 2021
As part of our Family Legacy Planning series, this is the third email devoted to a topic that is stirring up lots of hearts—writing a “legacy letter” or “ethical will” to future generations.
It often helps to see samples of other legacy letters. There’s a wonderful collection of such letters in Ethical Wills: Words from the Jewish HEART by Dr. Eric L. Weiner. Thanks to my dear friend and family counselor, Dr. Carole Rogers, for gifting me this treasured book.
Here’s one of my favorites:
I plan to leave you with something of spiritual and material value that will help you become responsible and caring members of society. The world is yours to explore and in that exploring, you will come to understand and appreciate your place in the big picture of life. A loving heart, positive values, strong character, and a social conscience are far more important than material wealth.
What a meaningful gift to leave wisdom like that to future generations. For more samples, click here.
A final word: Don’t lock the legacy letter away. Make it a family tradition to read it each year at an annual family meeting. It will be great fuel for meaningful conversation and fostering a lasting family legacy.
Marvin E. Blum
An “Ethical Will” memorable moment from the late 1980’s—Marvin and Laurie Blum passing down traditions to son Adam and daughter Elizabeth. An estate plan passes down not only valuables, but also values.
A “Love Letter” to Your Family – Part 2
May 4, 2021
In last week’s Family Legacy Planning email, we encouraged everyone to write a “love letter” (also known as a “legacy letter” or “ethical will”) to future generations.
I use the word “write” intentionally. This is a time when I urge you to put the letter in your own handwriting, even with scratch outs and insertions. Imagine how powerful it would be for future generations to see their ancestor’s words in their own script, written straight from the heart.
There are workshops devoted to writing such ethical wills, but you can sit quietly anywhere and create your own. Let the words flow. Don’t overthink it.
Family legacy consultant Dennis Jaffe speaks of a letter by the matriarch of a wealthy family read each year to G-2 and G-3 at the annual family meeting. Listen to her words:
Greetings to all of you as you gather for the annual family meeting. I want you to think about a paradox—Money is important/Money is not important. There’s a lot of truth in both statements. You’ve come a long way, babies, but remember where you came from—know your roots. T. S. Eliot said, “Where is the life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?
You need knowledge, wisdom, and vision. It’s our job to be good stewards of the gifts Papa left us. There are pitfalls inherent in having a family business. Be vigilant for the warning signs. I would rather you dismantle the family business than squabble over it.
A legacy letter is your chance to make your estate plan personal. The wills cover important legal matters, but there’s more to an estate plan than legalese. Look for more samples in next week’s email.
Marvin E. Blum
Marvin and Laurie Blum in a “legacy letter” moment in 1998 when son Adam played football and daughter Elizabeth was a cheerleader at Trinity Valley School—“as good as it gets!”
A “Love Letter” to Your Family
April 27, 2021
As part of The Blum Firm’s Family Legacy Planning series, we are focusing on the gift to your family of not just your valuables, but also your values. One of the greatest gifts you can leave your family is a “love letter” addressed to future generations.
Such a letter also goes by the name “legacy letter” or “ethical will.” This letter is your chance to communicate things you want future generations to know. It can include what you value most in life, your best memories and favorite moments, your hopes and dreams for your descendants’ lives, and wisdom you want to share.
There is no set structure for a legacy letter. It can be addressed to your spouse, your children, the whole family, or a separate letter to each. You can include a dozen topics or just your definition of happiness.
Here’s a list of possible topics:
- Your goals and hopes for the future of the family.
- Your values and beliefs.
- Experiences that helped build your character and lessons learned.
- What you want to be remembered for.
- Traditions you want future generations to continue.
- Your family’s history and family stories.
- Important events in your life.
- Memories and happiest moments.
- Your definition of success or happiness.
- The family’s mission statement.
- Causes important to you.
- People who influenced you the most (your heros) and what you appreciate the most about them.
Next week, we’ll dive deeper into this topic and provide some samples. Our hope is that we inspire you to pull out pen and paper and start writing!
Marvin E. Blum
Marvin Blum, celebrating a “Legacy Letter” memorable moment at the Bris (circumcision) of his grandson Oliver Savetsky. Marvin is joined by the Rabbi, daughter Elizabeth, and son-in-law Ira. The tradition continues.
Here’s the Blum Family Mission Statement
April 20, 2021
In last week’s email in our Family Legacy Planning series, we introduced the topic of a Family Mission Statement, setting out a family’s guiding principles. Although all families are diverse, there are certain core values that unify the family. Identifying the family’s purpose ties the family more closely together. In today’s frenetic world, it centers us to know that we stand for something solid. The ideal mission statement is visionary, setting out a path for our heirs to follow. By making it a part of our regular family communication, the mission lives on long after we are gone to help future generations remain connected.
As mentioned last week, there are no rights or wrongs. It can be short or long, but I like to think of it like the “elevator speech” that everyone can remember and recite during a single elevator ride. We adhered to that principle in setting the Blum Family Mission Statement, which came in handy when a New York Times reporter asked our mission when interviewing me for an article entitled “Looking for Ways to Keep Money From Dividing a Family.” Here’s what I revealed about the Blum family’s three-fold mission: “We value relationships. We value productive work. We value meaning in our life, from spirituality or whatever else can offer you something in terms of meaning.” The reporter commented that it might sound “like a sentiment scribbled on a Hallmark card” but acknowledged that we take it seriously.
I recently read an article in The Atlantic by Harvard professor Arthur Brooks that contained a sentence that grabbed my attention, as it lined up right on the mark with the Blum mission. In his weekly series on “How to Build a Life,” Brook urges us to Dream the Possible Dream, closing with this wisdom:
Dream of the person you want to be—not of how rich or powerful or famous that future self is, but about the life you will lead and work you will do to serve and enrich others maximally, leaving behind a world that is better than you found it. Then, consider what it will take for you to get there, and the happiness you will gain from the joyful journey of creating value and loving others with abundance. Finally, focus your attention on what you will do this day in your work, spiritual life, and relationships that keeps you on that path.
There you have it—the three tenets of the Blum mission: relationships, productive work, and spirituality. It’s reaffirming to know we’re on the same wavelength with Professor Brooks.
Marvin E. Blum
Marvin Blum with wife Laurie, mother Elsie, son Adam, daughter-in-law Brooke, granddaughter Lucy, daughter Elizabeth, son-in-law Ira, and granddaughters Stella and Juliet. Grandsons Oliver and Grey have since joined the Blum family.
What’s Your Family’s Mission Statement
April 13, 2021
In our series on Family Legacy Planning, The Blum Firm has been sharing ideas to discuss at family meetings. We recommend starting with visionary topics dealing with a family’s history, shared values, and the kind of family you want to be in years to come. The agenda then shifts to informational topics such as estate planning, business succession, and philanthropy. As learning comes together on both visionary and informational topics, the family has an enhanced understanding of who it is. Such a family is now prepared to tackle the next step: adopting a family mission statement.
The mission statement anchors a family. It sets out principles that are at the core of who the family is and what is important to it. The mission statement can go by different labels, but the purpose is the same. Whether it’s called a Family Values Statement, a Family Vision Statement, the Family’s Guiding Principles, or the Family’s Purpose, it guides the family on all major decisions. The mission should become part of the estate planning documents, guiding trustees when they exercise discretion or interpret the language of documents. All decisions should be consistent with the family’s mission statement.
The process of creating a mission statement is a unifying activity. All family members should offer input, as they will then feel a connection to it, achieving critical buy-in. A facilitator can aid the family in reaching consensus on a statement that reflects the essence of a family. The statement should be reviewed each year at an annual family meeting, and if necessary, may be periodically modified.
A mission statement can be short or long. There are no rights or wrongs. Here’s an example of one family’s mission statement: “We believe clear, constructive communication is at the core of our long-term success as a family. We encourage all efforts to further harmony, develop humor and perspective on life, and balance long-term concerns while enjoying the present; and to enhance communicative, caring and amicable relationships among family members.”
This is a family who understands that open communication is at the heart of family success. For five more examples of family mission statements, click here.
Be on the lookout for next week’s email where I’ll share the Blum family mission with you.
Marvin E. Blum
What if a Family Meeting Participant Is Disruptive?
April 6, 2021
It happens in every family—a family member “goes off” about something at a family meeting. Do not feel bad about it or feel your family is unique. This is part of normal family interaction. The key is to be prepared for it to happen and not let it throw off the process.
In our email series on Family Legacy Planning, we have stressed repeatedly the importance of having an experienced, objective third party serve as the facilitator at the family meeting. The patriarch and matriarch should be participants, just like everyone else. A neutral party can moderate the conversation, guide the process, synthesize comments, and shape consensus. Moreover, the family’s trained consultant can help restore calm when feelings are hurt or tempers flare.
Hot topics will invariably emerge. At the outset of the meeting, the facilitator can clarify that when (not if) such issues arise, everyone commits to remaining in the meeting and trusting the facilitator to handle it. Be prepared to deal with disruptions and assertions such as:
- sibling rivalry
- feelings that something is “not fair”
(Side note: It’s a difficult concept for some to grasp that “fair” doesn’t necessarily mean “equal.”)
Those feelings are normal and are a part of almost every family’s dynamics. The facilitator can moderate the temperature by acknowledging such issues, but put them in the “parking lot” to address later. Alternatively, the facilitator can call for a break and have private conversations to hear out the views and cool things down.
Unfortunately, there are occasions when things become so hot that a disruptive member prevents the process from being successful. At times like that, you can’t have unanimous participation. It is better for the process to continue with the rest of the family than for the process to stop. The facilitator can communicate the hope to the absent family member that he or she can rejoin the process later.
At The Blum Firm, we have developed a network of consultants to facilitate family meetings. We welcome the opportunity to help you find the right fit for your family.
Marvin E. Blum
A Deeper Dive into the Family Meeting Agenda
March 30, 2021
In recent emails in our Family Legacy Planning series, we stressed the importance of ending each family meeting by setting the agenda for the next family meeting. We recommended that the agenda topics for the first family meeting be more visionary or lofty, aimed at identifying a family’s ethos and shared values. As the meetings proceed, the family is ready to tackle more informational topics. At the conclusion of each meeting, poll the group to find out what issues are top of mind. Ask questions like: “What are you thinking about these days? What subjects would you like to explore?” The facilitator can then help the family reach a consensus on the topics for discussion at the next meeting.
Consider these suggestions:
- Update on the family’s business operations
- Plans for management succession
- Overview of the estate plan
- Review of the family’s philanthropic history
- Patriarch’s presentation on mistakes made and lessons learned
- Introducing the family to its team of advisors
As to the last suggested topic, many younger generation members aren’t acquainted with the family’s advisors. Lacking an understanding of the role they play, there is a tendency to replace the advisory team when the older generation is gone. Doing so deprives the family of advice from a team with valuable historical perspective. The family meeting is an ideal environment for younger family members to get to know the family’s advisors and learn the importance of working with a team of trusted advisors.
Topics such as these not only help a family learn who it is, but it also opens up lines of communication. Family members get to know each other on a deeper level and begin to develop trust. Recall that a breakdown of communication and trust is responsible for 60% of family failures. Families who become more inter-connected provide each other with meaningful support, especially during stressful times. Those families are better equipped to beat the odds of “Shirtsleeves to shirtsleeves in three generations.”
ONE FINAL TIP: I want to share a recommendation from a very wise client (and longtime friend of mine) who is a veteran of the family meeting process. (Thanks, Bryan.) On the day following a presentation by the family’s advisors, the family regroups on a follow-up call. Each shares what they heard and learned. Often a family member who was reluctant to ask questions in front of advisors is more willing to open up in a family-only debrief. Such a follow-up meeting insures that everyone heard the same thing and provides a chance to clear up any ambiguities. Now the family is moving into an important realm of lifelong family education: becoming skilled at teaching each other and learning from each other.
Marvin E. Blum
Warren Buffett’s Advice to Avoid Raising Entitled Kids
March 16, 2021
In The Blum Firm’s email series on Family Legacy Planning, last week’s email raised a question that stirred up a lot of interest. The focus of the email was suggested topics for discussion at the first family meeting. Our recommendation is to start the process with visionary, or “heart,” topics such as “What does it mean to be a member of this family? What do we stand for? Who are we as a family and what are the benefits of being part of this family?” Coming together to explore questions like these helps a family discover its ethos. This discovery helps unify the family around the family’s shared values. Following that opening discussion, future meetings can shift to more informational topics.
But before we shift from visionary topics to more concrete ones, let’s dive deeper into one of last week’s questions that generated curiosity: “How do we avoid raising entitled kids?” We at The Blum Firm have discovered that this question is one that keeps many of our clients awake at night. They worry about money ruining their kids. They often ask: How much is the right amount to give my kids? Here’s my favorite answer: The right amount to give your kids is the amount they are prepared to receive. The problem is less about the amount the kids receive, and more about the kids not being prepared to receive it. We have to be intentional about training our kids to be responsible inheritors. Preparing heirs is a big part of the family meeting process.
This question brings to mind an important Q & A I was privileged to have with Warren Buffett. At a Berkshire Hathaway annual meeting a few years ago, I was selected to ask the “Oracle of Omaha” a question. I decided to ask about his estate plan. I recalled his famous statement that he wanted to leave his kids “enough so they could do anything, but not so much that they could do nothing.” I asked him to share with us how much that is. In his thoughtful answer, Mr. Buffett went further. His advice sheds a lot of light on the challenge of raising kids so they don’t become entitled.
For a summary of my Q & A with Warren Buffett, click this link to read an article in The Globe and Mail (Canada’s version of the Wall Street Journal). The first sentence of Buffett’s answer to my question is powerful: “I think more of our kids are ruined by the behavior of their parents than by the amount of the inheritance.” In a nutshell, Buffett warns that our kids are watching us more than they are listening to us. There’s a lot to do in order for us to raise responsible kids, but it all starts by setting a good example.
Marvin E. Blum
Marvin Blum and Warren Buffett.
Bring a Crystal Ball to Your First Family Meeting
March 9, 2021
Now that The Blum Firm has added Family Legacy Planning to our offerings, we are often asked: “How do we get started?” After an initial assessment so we know the family’s starting point, the first big step is to plan a family meeting. We recently provided some “do’s” and “don’ts” for the first meeting’s agenda. In particular, we suggested to start by focusing on values, rather than valuables. Asking everyone to tell their favorite family traditions, stories, and memories offers a non-threatening way to kick off the discussion. Then “look into a crystal ball” and encourage the family to dream big. Start with visionary questions, such as “What you want the family to look like in 25 years?” Then create a plan to help get from the family you are now to the family you want to become.
Here are some additional visionary topics to consider. Feel free to pick and choose the ones that best suit your family’s situation.
- What is the purpose of our family?
- What is the purpose of the family’s wealth?
- How does wealth impact your life (both good and bad)?
- What do you want for your life?
- What do you want collectively for the family as a whole?
- How do we avoid raising entitled kids?
The advantages of starting with lofty topics is that it levels the playing field. Everyone’s view is valid, regardless of age or level of sophistication. There are no rights or wrongs. Every voice counts and needs to be heard. It opens the door for more free-flowing communication, rather than a technical topic where the presenter may appear to be talking down or lecturing to some in the room. The goal is for everyone to participate and feel respected.
At the end of the first meeting, engage in brainstorming to select topics for upcoming family meetings. After the visionary topics, the agenda shifts to more informational items, such as the family’s business, estate plan, finances, and philanthropy. Getting input on future agenda topics from G-2 and G-3 is not only insightful, but it creates important buy-in. Be on the lookout for upcoming emails that will dive deeper into suggested agenda topics for future meetings.
A FINAL TIP: At the end of each meeting, schedule the next family meeting. By always setting the next date, place, and agenda, the family meeting process will drive itself. Staying a step ahead assures the process continues, as a family meeting is not a “one and done” event.
Marvin E. Blum
Marvin and Laurie Blum with grandson Oliver Savetsky.
Do You Love Your Pets?
March 2, 2021
As part of The Blum Firm’s series on Family Legacy Planning, today we’re addressing another important part of family planning—pets. The pet owners I know consider their pets to part of the family, even closer family than many of their relatives. If you’re like 2 out of 3 American homes, you have a pet. Just as with other precious assets, pet owners need to consider what happens when they are no longer able to care for their pet. Most assume their family will step in, yet more than 500,000 pets are euthanized each year because there was no plan for their care.
Every state now has laws authorizing a “Pet Trust.” Consider adding a Pet Trust to your estate plan, naming a trustee to be in charge of carrying out your wishes. The trust should be funded with sufficient assets to provide for the annual cost of pet care times your pet’s life expectancy, plus an extra sum for unexpected needs, transportation, and the final disposition of your pet. The Pet Trust ensures that the money you designate is actually used for pet care.
In case you become unable to care for your pet while you are alive, consider adding provisions to your Power of Attorney to (1) allow your agent to give your pet to the new caregiver, and (2) authorize your agent to create and fund a Pet Trust if you become unable to do so.
The Blum Firm is committed to holistic estate planning that addresses both financial needs and matters of the “heart.” We would be honored to help you provide for all your loved ones, including the furry ones.
Marvin E. Blum
It’s all in the family: Marvin Blum’s granddaughters Juliet and Stella with Marvin’s “granddog” Basil Blum.
Don’t Let a Funeral Director Plan Your Next Family Gathering
February 23, 2021
As part of The Blum Firm’s new initiative on Family Legacy Planning, we have been stressing that the single most important step to family success is to plan regular family meetings. All too often, family gatherings occur only at holidays or are (heaven forbid) randomly dictated by a loved one’s passing. Family meetings should be intentional and planned, providing an opportunity for both meaningful content and fun interaction.
As last week’s email emphasized, the first rule is “Don’t Go It Alone.” We can help you select the right advisor to facilitate the meeting. The next steps are to determine who attends, when, and where. Pre-meeting interviews between the facilitator and each attendee will identify key topics for discussion. The family may also fill out an assessment form to further reveal issues needing the most attention. The next step is to set the agenda for the first meeting.
Here are some suggested “do’s” and “don’ts” for a first meeting:
- Don’t lead with the money. Many assume the first order of business is to review the family’s financial picture, entity structure, and estate planning documents. Although those are important topics, push them off to a later meeting.
- Start with a focus on the family’s values, not its valuables. Engage in an exercise to identify each family member’s key values, and then find the overlaps. By identifying common values, the meeting starts on a positive note. We want to begin with commonalities, and when “hot” issues or disagreements arise, put them in the parking lot to address later. The first meeting is better used to identify values the family treasures, which will be useful later in crafting a family mission statement.
- Another early activity is to engage in an exercise to identify each family member’s communication style. Knowing each one’s way of interacting, and even the way each one expresses love, will help as we work on opening communication channels and building trust. Recall that the single greatest cause for family failure isn’t inadequate planning; it’s lack of communication and trust.
- Tell family stories, especially stories of resilience and times ancestors overcame obstacles. When (not if) adversity strikes, knowing that you descend from survivors builds confidence that you also have what it takes to survive.
- Address visionary topics, such as each person’s ideal vision for the family’s future. Ask each to look into a crystal ball and envision what you want the family to look like in 25 years. What steps can we take now to improve the chances of looking like that family?
As we continue with this email series, be on the lookout for a deeper dive into suggested topics for family meetings. There are no right or wrong approaches. Let us help guide you to select the best topics for to kick off your first family meeting.
Marvin E. Blum
The First Five Steps to Plan a Family Meeting
February 16, 2021
Question: What percentage of families face communication challenges, or have issues they have swept under the rug, or have heirs who are not fully prepared to inherit?
When the patriarch and matriarch are gone, those issues cause many families to unravel. The solution is to face the issues head-on. The way to do that is by holding regular family meetings where the generations come together to connect and learn. Having a strong, interconnected family provides individuals with critical support to confront life’s challenges, recover from obstacles, and thrive.
The hardest step is to plan the first family meeting. People just don’t know how to get started. Fortunately, there are advisors who are trained to guide you through the process. Don’t try to go it alone. At The Blum Firm, we have resources to help you identify the advisor who will be the right fit for your family. For optimum results, the patriarch and matriarch need to be participants at the meeting and not lead it. Leading the meeting, moderating the conversation, objectively (and delicately) addressing the “hot issues”—that’s the job for a trained facilitator.
So here’s the way to get started:
- Step 1: Select an advisor to guide the family meeting process.
- Step 2: Identify the family members who need to attend the meeting.
- Step 3: Decide on a mutually convenient time.
- Step 4: Choose the location. Note: COVID has taught us that we can even do the meeting virtually, by zoom (“Brady Bunch” style), making scheduling a lot easier.
- Step 5: The facilitator conducts a pre-meeting interview with each participant to set expectations and identify hot button issues.
In our next email, we’ll dive into Step Six—creating the agenda for the first meeting. Hint: The first topic won’t be to discuss money. Stay tuned!
Marvin E. Blum
The First Step is the Hardest: Family Legacy Planning
February 9, 2021
In our last email about the Family Legacy Planning work we’re doing at The Blum Firm, we pointed out the sobering statistic that 90% of families fail. The main two causes of failure are (1) lack of communication and trust, and (2) unprepared heirs. Only 10% manage to escape the adage “shirtsleeves to shirtsleeves in three generations.” By looking to the successful 10%, what steps can we take to improve the odds our family will be in the 10% column?
After much research, we have determined that the first and foremost contributor to success is to hold regular family meetings. Families need to be intentional about meeting in order to build a healthy connection with each other. Those are the families that build communication and trust. Those meetings also provide a setting to prepare heirs to become responsible inheritors.
I have been preaching this gospel for years, going back to a workshop I co-facilitated years ago in New York. The New York Times covered my work in an article “Looking for Ways to Keep Money From Dividing a Family.” (Link here.) Allow me to share a heartwarming story about that article that just came to my attention.
A prominent executive in Memphis, Tennessee recently died, and a group was going through his possessions. One of them came across that article, now more than six years old, which he had saved among his important papers. On it, he’d written the notation “Family Mtg,” double underlined with a star. It turns out the article inspired him to hold a family meeting. I didn’t know the gentleman, but one of his team members tracked me down to tell me I’d made a difference in the lives of this family. Learning that I made an impact on people I never met inspires me to keep preaching the gospel of conducting regular family meetings. It’s why Family Legacy Planning is an important part of the holistic estate planning we do at The Blum Firm.
We recognize that the hardest step is to plan the first family meeting. In the next email, we’ll focus on some tips to help you plan that first meeting, but here’s the first one: Don’t go it alone. Engage a trusted team of advisors to facilitate the meeting. The Blum Firm would be honored to help guide you through the family legacy process.
Marvin E. Blum
A copy of The New York Times article “Looking for Ways to Keep Money From Dividing a Family,” found among a deceased executive’s important papers with “Family Mtg” written on it, double underlined and with a star.
Do I Need To Do Family Legacy Planning?
February 2, 2021
In reading The Blum Firm’s email series about our newest initiative, it may lead you to ask yourself: Do I need to do Family Legacy Planning? The answer often follows from honestly asking yourself these two questions:
- “Are my heirs truly prepared to inherit?”
- “Are there issues in my family that if not addressed could lead to a breakdown in communication and trust?”
Consider these daunting statistics:
- 90% of families dissipate their wealth within two generations after inheriting it, falling victim to the proverb “shirtsleeves to shirtsleeves in three generations.”
- Research reveals the causes for this failure: 60% is due to lack of communication and trust, and 25% is due to unprepared heirs.
If your answer is “Yes, I need to do Family Legacy Planning,” the next question is usually: “How do I get started?”
In the next email in this series, we will begin unpacking the process. The first step is to find the right advisor and plan a family meeting.
Be on the lookout for more to come on how to be one of the successful 10%.
Marvin E. Blum
The Super Bowl of Estate Planning: Family Legacy Planning
January 26, 2021
We recently introduced the topic of Family Legacy Planning, an offering The Blum Firm provides as part of the estate planning process. The aim is to help families succeed. With the Super Bowl coming up, let’s put this into football terms.
Noted family governance consultant James Grubman uses the analogy of a football game to illustrate what happens if you fail to prepare your heirs. At a football game, the focus is on the quarterback. The quarterback has perfect throwing skills. He hurls a pass from one end of the field to the opposite end. The football (the inheritance) is coming at the receivers, but no one has told them it’s coming, prepared them for how to catch it, or taught them what to do with it if they catch it. They’ve never been to a practice. They’ve never been taught the rules. They don’t even know how to coordinate with each other as team players. What are the odds that the receivers will catch the football and run the length of the field, without fumbling it, to score a touchdown? A family with unprepared and disconnected heirs almost always “drops the ball.”
Just as in a football game, you need to tackle these issues head on. You can’t wish them away and hope your heirs will figure it out. Hope is not a strategy. Let us at The Blum Firm help your family adopt a strategy to win the game.
Marvin E. Blum
Painting by Marvin Blum of his son Adam when Adam played football at Trinity Valley School. Let’s win this Family Legacy game!
What is “Family Legacy Planning?”
January 19, 2021
Last week, we announced that The Blum Firm is launching a new initiative: Family Legacy Planning. That announcement generated a lot of interest, as well as the question: Why?
After 42 years as an estate planning attorney, I have witnessed many heartbreaking situations where an inheritance tore a family apart. Over the last decade, I have been studying successful families and asking:
- “What are the best practices of successful families that my clients should be doing?
- “As a lawyer, how can I help my clients implement these best practices?
This research is what led us to add Family Legacy Planning as an offering for our clients.
In a nutshell, just what is Family Legacy Planning? Traditional estate planning addresses the family’s valuables—where, when, and how they pass to future generations. Family Legacy Planning addresses the family’s values. Its mission is to pass down more than wealth, but also a family’s ethos, improving the odds the family will remain meaningfully connected for generations to come. Its aim is to pass down the skills and tools to help heirs face life’s inevitable challenges and not only survive as a family, but thrive.
The COVID pandemic is a natural time of reflection. It has made all of us aware of family issues we’ve been sweeping under the rug. These issues don’t go away. In fact, they tend to erupt when a senior generation member dies. Addressing them is hard, but it’s an act of love. Now is the ideal time to start.
Over the coming weeks, be on the lookout for regular emails as we explore the steps you can take to help your family succeed. The Blum Firm is proud to partner with you on this critically important endeavor.
Marvin E. Blum
Generations of family legacy: Marvin Blum’s mother is seated at far left; in center is his great grandfather “Zaidy.” Marvin is now “Zaidy” to five grandchildren. A legacy passes down a heritage from generation to generation.
New Initiative Launch: Family Legacy Planning
January 12, 2021
When The Blum Firm reached our 40th anniversary three months ago, I announced the milestone by reflecting on how our estate planning law firm has grown and evolved over the years. In that announcement, I shared that we would be launching a new initiative in early 2021. I’m excited to celebrate that new offering with you now: Family Legacy Planning.The aim of this new endeavor is to partner with you to create a process and structure to help your family succeed from generation to generation. It takes more than hopes and dreams for future generations to thrive. Hope is not a strategy. We need to be intentional.
Family Legacy Planning has started to emerge as a critical part of the estate planner’s toolbox. It was born out of asking clients: “What keeps you awake at night?” We learned how much our clients worry about their family’s future. We have all observed horror stories of inheritances that failed.
Labels began to surface to try to put a moniker on this new aspect of planning: Family Governance; Holistic Estate Planning; Family Dynamics; “Heart” vs. “Head” estate planning; Qualitative vs. Quantitative estate planning; the “Soft” issues of estate planning (although, ironically, these issues are typically “hard” to address). We believe the term “Family Legacy Planning” encompasses all these concepts.
Coming out of 2020, now seems an ideal time to focus on the family. The pandemic heightened our awareness of our need for family, as well as the fragility of this precious asset. On a personal note for Laurie and me, mixed in with the hard times came the gift of two new grandsons, born only a few weeks apart. There’s nothing like having grandkids to make you even more acutely aware of the importance of both the “head” and the “heart” aspects of estate planning. A family’s financial success, important as it is, is only part of the story. We want to create a meaningful legacy and pass it down to our heirs. As we say in Hebrew, L’dor Vador, from generation to generation.
In the coming weeks, be on the lookout for regular emails from us explaining the features of Family Legacy Planning. We urge you to make it a New Year’s Resolution to focus on your family this year and learn the steps you can take to help set up your family for success.
Marvin E. Blum
Marvin and Laurie Blum and their growing family.